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Brussels, 20 April 2009

Financial services: Commission launches consultation on new legal framework for intermediated securities

The European Commission has launched a consultation on the harmonisation of the legal framework for securities holding and transactions. Following a request by the Economic and Financial Affairs (ECOFIN) Council, the Commission intends to come forward with a legislative proposal to increase legal certainty and efficiency of securities holding and improve protection of investors' rights, as well as address some other related aspects. Before doing so, it wishes to consult all interested parties. The closing date for replies is 11 June 2009.

The ECOFIN Council, in its conclusions of 2 December 2008, invited the Commission to present, as a matter of urgency, the outline of legislative measures for a harmonised legal framework for intermediated securities, including the conflict-of-laws issue, and better protection of investors' rights enshrined in their securities. In this context, the ECOFIN welcomed the preparatory work done by the Commission's Legal Certainty Group and agreed with its assessment that EU legislation was needed in this area.

Against this background, the Commission Services are currently preparing a legislative proposal addressing the relevant aspects relating to the legal certainty and efficiency of securities holding and transactions. Under the chosen approach, the proposal will address four issues: (a) the legal framework of holding and disposition of securities held in securities accounts, covering aspects belonging to the sphere of substantive law as well as conflict-of-laws; (b) the legal framework governing the exercise of investors' rights flowing from securities through a "chain" of intermediaries, in particular in cross-border situations; (c) the establishment of the free, EU-wide choice of issuers regarding the initial entry of their securities in the relevant holding structures, in particular central securities depositories; and, (d) the submission of any activity of safekeeping and administration of securities under an appropriate supervisory regime.

The Commission intends to propose a legislative measure covering these aspects towards the end of 2009. Before making its proposals, the Commission invites any interested parties to submit their comments on the basis of a consultation document.

The consultation is available at:

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