ECSDA (European Central Securities Depositories Association) today published the key points of its contribution to the consultation on clearing and settlement the EU Commission published on 28 May 2002. ECSDA considers of highest importance that the work of European Authorities takes into account the following ten principles:
Avoid over-regulating clearing and settlement functions in order to keep the regulatory framework flexible and to reduce costs (e.g. by means of high-level principles to be enacted by the market through self regulation).
Support risk minimisation and competition.
Promote a clear and unambiguous legislative framework across Europe, minimising the potential conflicts of laws (e.g. consistent application of the same principles in all directives and national laws).
Ensure a level playing field between providers of clearing and settlement services. The adoption of a functional approach to regulation, focused on “systemically important settlement systems”, should be considered.
Provide open, fair and equitable access to clearing and settlement, reducing the risks of national protectionism.
Support the development of generally agreed standards for European clearing and settlement systems (ECB-CESR work on C&S).
Promote tax harmonisation. Where full harmonisation is not achievable, support the adoption of measures that reduce inefficiencies in cross-border settlements.
Ensure transparency of risks involved in clearing and settlement by encouraging the use of “risk disclosure documents” (e.g. the IOSCO-CPSS risk disclosure framework).
Recognise and support the work of private bodies (such as ECSDA, FESE, EACH, etc.) in developing common standards on technical issues (interoperability, corporate actions, etc.).
Favour continuous dialogue between European Authorities and market participants in order to keep the regulatory framework updated and consistent.