On 23 July 2014, the Council announced that it adopted the Regulation on improving securities settlement and regulating central securities depositories (CSDs). This is the most recent step towards the establishment of a single European securities market.
The regulation is expected to be published in the Official Journal in Q3 2014. By 1 January 2015, T+2 settlement cycle should be mandatory and by 1 January 2025, all transferable securities which are admitted to trading on a trading venue (same scope as in MiFID II: regulated market, MTF or OTF) will be represented only in book-entry form. Certain investors in the UK and Ireland are still holding a number of securities in paper form (e.g. paper share certificates), which can take up to 10 days to settle.
The regulation pursues a twofold objective:
- Harmonise different national rules, which should allow CSDs to provide their services on a cross-border basis
- Eliminate competitive distortions, since at the moment there is rarely more than one CSD per Member State
The regulation takes into consideration both the international principles from the CPSS-IOSCO on financial market infrastructures and the EU best practices proposals from the TARGET2-Securities (T2S) Harmonisation Steering Group, which are supported by the majority of CSDs in EU.Contact Us