The central securities depositories organisations of eastern and western Europe have completed the merger they announced at Sibos in Copenhagen in September last year. The European Central Securities Depositories Association (ECSDA) general meeting on Friday officially approved the admission to membership of the 17 members of the Central and Eastern European Securities and Clearing Houses Association (CEECSDA).
In a statement, ECSDA chairman Joel Merere said the new, 39-member ECSDA would “constitute a larger forum of discussion and therefore provide a much more representative interlocutor for European Authorities. It will facilitate the access to information relating to its members, notably helping its stakeholders in particular in the framework of consultations, and determining common positions when necessary.”
The logic of the alliance, according to ECSDA, is that ECSDA and CEECSDA share the same objectives: to “provide advice at international level on technical, economic, financial, legal and regulatory matters to reduce risk and settlement arrangements for securities and related payments across Europe for the benefit of issuers, investors and market participants.”
But the obvious ambition of some of the leading CSD-ICSD and banking groups in western Europe – notably Greater Euroclear and Deutsche Borse/Clearstream, but also OMX and the Austrian consortium that has taken control of the Budapest stock exchange – means that there are bound to be tensions between the CSDs and CCPs of east and central Europe and their western counterparts that the formation of the larger grouping cannot entirely dispel – especially where clearing and settlement entities are vertically integrated with the domestic stock exchanges.
ECSDA was set up in November 1997 as the Association of European Central Securities Depositories (CSDs). It describes its “primary objective” as “harmonisation of market practices in Europe to support the creation of a single European capital market.”