Harmonisation of Securities Law
The Giovannini Reports of 2001 and 2003 described three spheres of
difficulties within the post trading sector, relating to
- technical requirements and industry practices;
- taxation; and,
- 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 concluded on 2 December 2008 that
"EU legislation is needed in this area providing for a more
harmonised legal framework for intermediated securities and a better
protection of investors' rights enshrined in their securities".
Furthermore, the Council invited the Commission "to present its
response to the Legal Certainty Group Advice as a matter of urgency,
including an outline of proposed legislative measures, accompanied
by precise timelines for their effective submission to the European
legislator, bearing in mind the benefits of maintaining global
compatibility with other jurisdictions."
The Commission Services are currently preparing a draft Directive
on legal certainty of securities holding and transactions (Securities
Law Directive – SLD). The Directive is expected to address four
issues:
- 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;
- the legal framework governing the exercise of investor's rights flowing
from securities through a "chain" of intermediaries, in particular in cross-border
situations;
- 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,
- the submission of any activity of safekeeping and administration of
securities under an appropriate supervisory regime.
Timetable of the project
| January-April 2010 |
Discussion of the preliminary draft directive with Member States'
experts |
| March-April 2010 |
Second public consultation |
| July 2010 |
Adoption by the Commission; transfer to the European legislator |
| Mid-2011 |
Finalisation of the legislative procedure |
| End-2012 |
Finalisation of transposition into Member States' law |
First public consultation of interested
stakeholders
The Commission invited any interested parties to submit their
comments in a first public consultation, held from 16.04.2009 to
11.06.2009. A second public consultation is scheduled for March-April
2010.
Background documentation
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