Deutsche Borse has expressed its support for the overall assessment and measures proposed in Volume II of the Giovannini Report on clearing and settlement.
The company says it shares the experts’ view that in order to raise the level of efficiency in clearing and settlement in the EU, regulatory barriers have to be dismantled and uniform standards developed. It recons, based on calculations presented in a white paper published by Deutsche Borse in April 2002, that some 40 per cent of the inefficiencies in cross-border equities trading are attributable to the differences in the framework conditions. According to these calculations, another 40 per cent cannot be influenced at all because they result from different languages within the EU, for example, or from the lack of economies of scale. This calculation indicates that only some 20 percent of the inefficiencies can be influenced by trading participants, exchanges and clearing organizations.
Deutsche Borse says it contributed to the report and supports the Giovannini Group’s call for settlement systems to be opened up. However, it says that Clearstream will continue to be the preferred settlement location for German securities “due to its superior offerings.”
That said, Deutsche Borse says it regards opening up the settlement systems Europe-wide to allow mutual access as offering it additional business potential in clearing and settlement. It retiterates that it is committed to work with other infrastructure providers to further increase the efficiency of cross border settlement. Clearstream currently maintains 39 direct or indirect links to settlement organizations worldwide – more than any other provider.
Deutsche Borse also shares the Giovannini Group’s view that for the function performed by a Central Counterparty the model of user choice does not have to be applied.