Harmonisation of Securities Law

The Giovannini Reports of 2001 and 2003 described three spheres of difficulties within the post trading sector, relating to

1. technical requirements and industry practices;
2. taxation; and,
3. legal certainty.

Within these three areas, the Reports identified fifteen specific obstacles to the emergence of a truly single post-trading market in the EU, the so called "Giovannini Barriers". The Commission mandated an expert group, the Legal Certainty Group, to advise on the dismantling of the barriers having legal issues at their source. The Group, in its 2008 Advice on Solutions to Legal Barriers related to Post-Trading within the EU called for EU-wide harmonisation of certain areas of law and the preparation of EU legislation in this field. This advice was endorsed by Commissioner McCreevy and the ECOFIN Council, which, in its conclusion 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.

Future EU legislation in this area is expected to address four issues:

1. 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;
2. the legal framework governing the exercise of investor's rights flowing from securities through a "chain" of intermediaries, in particular in cross-border situations;
3. 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,
4. the submission of any activity of safekeeping and administration of securities under an appropriate supervisory regime.

Public consultation of interested stakeholders

The Commission intends to propose a legislative measure covering the abovementioned aspects to the European legislator 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 prepared by its services to this effect.

• Consultation webpage

Background documentation

• Legal Certainty Group website
• CESAME Group report
• European Commission work on the Hague Securities Convention
• European Commission Financial Services website
• Commission Communication on Clearing and Settlement (2004)
• Second Giovannini Report (2003)
• First Giovannini Report (2001)