The European Commission has been examining the barriers to European securities markets for several years with the aim of creating a safe and efficiently functioning single market for financial services.
The first and second Giovannini Reports identified several obstacles to the emergence of a single post-trading market in the EU. Building on this work, the Commission established an expert group, the Legal Certainty Group, to advise on how best to dismantle the legal barriers that had been identified. In its conclusions, the Group called for the harmonisation of certain areas of law and the preparation of EU legislation in this field. More recently, in the wake of the financial crisis, significant efforts have been undertaken by EU regulators to ensure a more stable financial system in the future. As collateral in the EU is normally given in the form of securities, these efforts rely on the fact that the securities collateral is legally safe and available to be enforced in the event of a default. The legal uncertainty coupled with stability risks poses significant barriers to the safe and efficient functioning of the Single Market, restricting cross-border activity, reducing clarity and certainty, as well as limiting opportunities for businesses and compromising investor protection.
Member State Expert Group on securities law