The European Commission on Wednesday 16 March proposed changes to the regulation governing central securities depositories (CSDs), which administer the infrastructure that enables the settlement of securities (such as shares or bonds) in financial markets. It wants to improve the efficiency of EU settlement markets, while preserving financial stability.
As the European Commission points out in its press release, it can take up to two working days to settle a transaction, which can create credit and legal risks. As an illustration, transactions settled by EU CSDs reached around €1,120 billion in 2019.
The review proposal is a key element of the 2020 Action Plan for the Capital Markets Union (see EUROPE 12840/6). The European Commission hopes to “increase the attractiveness of EU capital markets” and “contribute to the financing” of the European economy.
“Europe’s capital markets are central to financing our economy, including the green and digital transitions, but obstacles remain to unlocking their full potential. We want to make central securities depositories more efficient and competitive, while preserving financial stability”, said European Commissioner for Financial Services Mairead McGuinness after the College of Commissioners meeting.
“By reducing red tape for CSDs that want to expand their activities cross-border, we are creating a truly single market for securities settlement in the EU and promoting competition in the market”, she added.
The proposed simplification of the CSD Regulation aims to make improvements at five levels: - the European passport scheme; - cooperation between national supervisory authorities; - banking-type ancillary services; - discipline in the field of regulation; - the monitoring of CSDs from third countries.
The CSD Regulation was adopted in 2014 in the wake of the financial crisis. The proposed measures are based on the results of a targeted consultation conducted by the European Commission, as well as on contributions received from various stakeholders, including the European Securities and Markets Authority.
“Today we are taking another step forward to create more efficient and attractive European capital markets, to benefit investors and businesses, including SMEs”, concluded Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People.
To read the proposal: https://aeur.eu/f/sx (Original version in French by Anne Damiani)