In recent years, significant progress has been achieved in removing costly and burdensome barriers in the post-trading area, enhancing market infrastructure resilience and promoting financial stability.
A Regulation on OTC derivatives, central counterparties and trade repositories (EMIR) came into force on August 2012 after agreement between the European Parliament and the Council of Ministers. The Regulation requires standard derivative contracts to be cleared through central counterparties –CCPs- and establishes stringent organisational, business conduct and prudential requirements for these CCPs. It has also introduced an obligation to report derivative contracts to trade repositories. The Regulation, directly applicable and enforceable throughout the EU, will considerably increase financial stability and safety by preventing the situation where a collapse of one financial firm can cause the collapse of other financial firms.
Another important step was the adoption by the Commission of a proposal for a Regulation on improving securities settlement in the European Union and on central securities depositories (CSDs). Once adopted, the Regulation should introduce an obligation for the dematerialisation of most securities, harmonised settlement periods for most transactions in such securities, settlement discipline measures and common rules for central securities depositories (CSDs).
These are important steps. However, we are convinced that further progress is required to remove all the barriers linked to post-trading to create an efficient market infrastructure that ensure financial stability. In the Internal Market, it must be as easy to buy, own, lend and sell foreign shares and other securities as domestic ones in a fully secure environment.
To achieve this, some key challenges remain such as CCP recovery and resolution, the Securities Law and to abolish the fiscal compliance barriers related to post-trading after the success with the Commission Recommendation in this field.
These measures are all necessary steps to promote a policy that increases stability in the financial system, enhances legal certainty and brings more efficiency. We are fully determined to complete this agenda.