EU policy makers are closer to agree on securities settlement rules

European policy makers are increasingly confident that regulations for Europe’s €800tn securities settlement market will be finalised and passed into law by the end of the year.

The new rules governing region’s central securities depositories aim at creating better competition between national entities and cut cross-border settlement costs.

The ECB is planning to make operational the Target2Securities (T2S), its own platform for securities settlement across Europe, in 2015. The proposal is at the moment before the council of ministers in Brussels but it will still take some time until any date is set. Among other things, the harmonisation of the trade times across Europe is still needed.

The cumulative effect of legislation such as Dodd-Frank, Basel III and the G20 requirements for mandatory central clearing of derivatives contracts, has left the financial services industry fearing a shortage of available collateral to back trades.

And companies and custodial banks are looking at ways to cut costs and free up more collateral for customers in the meantime.

To read more go to FT article.

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