Brussels, 15th December 2003
Securities markets: Commission proposes that the Community sign the Hague Securities Convention
The European Commission has proposed that the European Community should sign the Hague Convention, a multilateral treaty on determining the ownership of securities held in electronic form. The proposal takes the form of a draft Decision to be adopted by the EU's Council of Ministers authorising the signature of the Convention. The Convention provides a uniform legal formula for determining proprietary rights and will be particularly useful in cases where securities are held through a chain of financial intermediaries in different countries. When adopted, the Convention will affect a number of existing EU Directives, such as the Collateral Directive (2002/47/EC) and the Settlement Finality Directive (1998/26/EC). The signature of the Convention will send an important political signal to all parties concerned and in particular to the financial services industry, which widely supports its implementation.
Internal Market Commissioner Frits Bolkestein said "In an environment in which the great majority of securities are a lready held in electronic form, a world-wide agreement on a common legal formula to determine proprietary rights will stimulate cross-border activity, not only at EU level but on a global scale, and will become an important factor in promoting the internationalisation of financial markets".
The Convention was negotiated within the Hague Conference, a worldwide intergovernmental organisation which works for a progressive unification of the rules of private international law. The final text was agreed on December 13, 2002.
The Convention belongs to the so-called "mixed type" group of Conventions to which both the Community and the Member States are parties. Member States have called for its rapid approval and entry into force.
The Community's approval of the Convention is to be carried out in two steps, first "signature" and then "accession", or ratification. This second step will be based on a Council Decision requiring the approval of the European Parliament.
Following the signature of the Convention, the Commission will put forward a proposal for the necessary Council Decision and at the same time, proposals to amend the Directives affected.
The Commission hopes that ratification can be completed in 2004 or early 2005.
The full text of the proposal is available on the Commission's Europa website: