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The Permanent Representatives Committee (Coreper II) has on September 25 confirmed the agreement on legislation aiming at improving the securities settlement in the EU and at creating common regulatory framework for the central securities depositories. The general approach on the Central Securities Depositories Regulation gives the Lithuanian Presidency of the Council the mandate to start negotiations with the European Parliament with a view of reaching a first reading agreement.
“Today we have agreed on an important step to ensure safer European environment for post-trade. The Lithuanian Presidency is now ready to move to negotiations with the European Parliament,” said chair of the Coreper, ambassador Raimundas Karoblis.
The regulation aims to eliminate differences between domestic and cross-border securities settlements, enhance the safety and efficiency of the cross-border settlement and facilitate easier access to the depositories for the issuers, investors and depositories themselves.
The regulation also ensures equal level playing field across the EU which should increase the overall market transparency and facilitate the movement of capital. The Regulation creates a common authorisation, supervision and regulatory framework for CSDs and improves the securities settlement process by introducing the dematerialisation requirement, harmonising the settlement period and determining the settlement discipline measures.
This regulation, together with other legislative initiatives (EMIR and MiFID), is important for enhancing the safety and soundness of the financial system and will form a framework in which systemically-important securities infrastructures are subject to common rules on the European level. The regulation gives a solid legal background to the TARGET2-Securities project which harmonises operational aspects of securities settlement.
