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EU directive on clearing the slide (Markets & Finance)

The clearing and settlement systems between different countries are "Too expensive"

slide the proposal for a directive to create an integrated market at European level in the clearing and settlement in securities transactions. The committee should publish a "road map" with the aim of solving the problem of excessive cost of clearing and settlement systems between the different member countries, that cost has a direct impact on investors. While continuing the consolidation trend that has recently affected the post-trading activities, and advancing the project that aims to create by the end of this year through the merger between the London Clearing House (LCH) and Clearnet, the largest company in the field of active European clearing of securities, the Commission takes time and opens the launch of the draft directive on clearing and settlement systems.
In its place, at the end of October, the Commission will publish a communication on the basis of the results of the consultation launched by the European executive in May 2002 and two reports of specially crafted, will trace the actions it intends to take in the coming months. "The clearing and settlement systems are the foundation of the financial markets and as long as we are not able to integrate them we will not be able to build a single European market for financial services," said Alberto Giovannini, who led the group of experts and practitioners mandated by the Commission to identify obstacles and propose technical solutions for higher rarli. The lack of integration in this field implies in fact that the cost and the risk of cross-border trading resulting in much higher than in the case of internal negotiations to a single national system. After the launching, under the "Financial Services Action Plan" launched by the Commission in 1999, a number of Directives (the most recent ones on insider dealing and market abuse, the Prospectus, the Funds retirement, while the next step should be the new Investment Services Directive) aimed at creating a single market in financial services, on what the issue is thorniest, Brussels still prefer not to put on the table the proposed legislation. Meanwhile, European markets the weather heats up: The London Stock Exchange, concerned that the weight of rival Euronext (which controls Clearnet) will take over the new company "LCH.Clearnet ', has sided against the proposed merger between LCH and Clearnet and LCH has threatened to leave to appeal to a rival system.