Brussels, 22/04/2008 (Agence Europe) - European Internal Market Commissioner Charlie McCreevy set out the Commission approach on removing fiscal barriers to the integration of clearing and settlement markets at a conference on back office operations, organised by the European Central Bank (ECB) in Frankfurt on Monday 21 April. This approach, based on the recommendations of the Fiscal Compliance Group (FISCO), has two sections: - immediately establishing bilateral contact between the two member states concerned to settle transaction tax procedures problems; - drawing up a recommendation in 2009 on withholding tax procedures. Later in the year, a further expert group will give its final opinion on the legal barriers restricting the integration of the back office sector. In line with Ecofin Council wishes, the Commission will bring forward concrete plans and a timetable for removing the legal and fiscal barriers identified in the “Giovannini report” (see EUROPE 9518). The Commission is putting the finishing touches to amendments to the directives on the settlement finality in payment and securities settlement systems (98/26/EC) and on financial collateral arrangements (2002/47/EC) to adapt European legislation in the light of market developments.
The Commissioner also believes that the “gamble” of favouring a code of conduct to encourage competition on clearing and settlement markets “is paying off”. He said that there was increased price transparency, services had been unbundled and accounts would be provided on a separated basis. He added, “Any other alternative instrument - including a legislative one - would have blocked the momentum” of the integration of the markets in question and would have diverted attention from innovation. McCreevy acknowledged, however, that difficulties remained, particularly in the area of access and compatibility. “The issues need to be sorted out in the coming months,” he said, noting that the November 2006 voluntary code of conduct was “the last chance” for the industry to find solutions to the problems raised. The code of conduct, adopted at the end of 2006, has three sections: price transparency, access to infrastructure supplier services, and interoperability, unbundling of services and separate accounting (see EUROPE 9301). (M.B.)