Brussels, 24/08/2005 (Agence Europe) - The organisation Fair & Clear considers the report by the MEP Piia-Noora Kauppi (EPP/ED, Finland) on clearing and settlement in the EU to constitute a “well-balanced approach between market-driven actions and regulatory initiatives” (see EUROPE 8987 and 9004). In order to create an effective European system for “post-trade” operations, as recognised in the Kauppi report, the issues relating to the “systematic risk” and “anti-competitive behaviour” must be tackled, Fair & Clear indicates in a press release. The organisation also “supports the definition of Central Securities Depositories (CSD), and International Central Securities Depository (ICSD)” and “the distinction between their functions” provided by the Parliament rapporteur.
Fair & Clear is an informal association of the banks BNP Paribas Securities Services, Citigroup, DnB-NOR and SEB which provide clearing and settlement services. The clearing and settlement systems allow for so-called “post-trade” operations. Clearing is the process of calculating mutual obligations of the parties in a transaction - who owes what to whom. Settlement is the transfer of securities and funds between the parties. It is generally part of the transfer of property.