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Brussels, 21 March 2005

Clearing and settlement: Outcome of consultation

The 82 responses, published today, to the European Commission’s second consultation on securities clearing and settlement in the EU are generally supportive. The consultation, launched in April 2004 (see IP/04/551), sought views on the general objectives and specific nature of action to foster efficient cross-border clearing and settlement, essential for market participants to operate effectively in an integrated EU financial market. Respondents broadly backed Commission proposals to consider a Directive on Securities Clearing and Settlement, to set up an Advisory and Monitoring Expert group, and to address legal and fiscal compliance discrepancies through the creation of two further expert groups. Respondents also agreed that the Commission should continue ensuring the effective implementation of competition law. The summary of responses is on the Europa web site at:

Single market Commissioner Charlie McCreevy said: "I am very pleased with markets and public authorities’ responses and we will take all of them very seriously. They will help us to make the most appropriate contribution to more cost-effective, more competitive and safer clearing and settlement in the EU. That is what is needed if citizens, businesses and investors are to reap the full benefit of an integrated EU financial market. But we certainly won’t be rushing into legislation: Any proposal will first be tested by a fully-fledged, comprehensive impact assessment. Any decision on the content, nature and scope of a Directive will depend on the evidence produced by that assessment and on the extent to which rigorous analysis shows that measures envisaged will materially improve liquidity, reduce costs, and enhance safety in clearing an settlement within the EU ".

Positive response

The Commission received 82 responses to the consultation, from:

public authorities, including supervisors and central banks; and market operators

Respondents generally supported the development of an integrated, efficient and safe clearing and settlement environment in the EU with a level playing field among the different providers of relevant services. Most agreed with the Commission’s multi-pronged approach to tackling the various inefficiencies and barriers and with practical co-operation between private and public sector bodies to get results.

Respondents show support for the Commission playing a major role in providing the political impetus, co-ordinating action and creating, if necessary, the legislative framework for improvements to pan-European clearing and settlement systems. The majority of respondents (47) supported the adoption of a Directive (though with diverging views on its exact contents).

Nine advised caution. Six were explicitly against a Directive. Seven others on balance took a negative view. Thirteen did not take a position or were unclear. There was very strong support for setting up the three expert groups envisaged.

Next steps

The Commission is preparing a regulatory impact assessment for possible legislative action and is continuing to consult stakeholders’ in all the appropriate fora.

The Commission has already established two expert groups – the Clearing and Settlement Advisory and Monitoring Expert (CESAME) Group and the legal certainty group. It intends to set up the fiscal compliance group in the next couple of months.

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