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March 2011


LSEG Response to European Commission Consultation on Central Securities Depositories (CSDs) and the Harmonisation of Certain Aspects of Securities Settlement in the European Union.

The London Stock Exchange Group has submitted a response to the European Commission’s public consultation: “Central Securities Depositories and the harmonisation of certain aspects of securities settlement in the European Union".

Our submission outlines our views on the post trade environment and highlights our key points in respect of an appropriate regulatory structure for CSDs and on the harmonisation of settlement discipline and settlement periods. In summary:

·         We share the European Commission’s view that Central Securities Depositories (CSDs) play a systemically important part in the post-trade environment and support the intention to look at both an appropriate regulatory framework for CSDs and the harmonisation of key post trade processes in the EU;

·         We believe that the regulatory framework should be based on the principle of lead authorisation by the competent authority of the Home Member State and should establish a standard approach to recognising CSDs across the EU;

·        We support the intention to abolish the restrictions of access between issuers and CSDs.  However, it is not clear whether this could be achieved without significant corporate law and fiscal harmonisation;

·        We consider that the harmonisation of key post trade processes is important if cross-border investment and trading are to be improved. However:

·         We believe that buying-in rules should be appropriately calibrated to take account of differences in the types and liquidity of securities and that the operation of such rules should be at the discretion of the relevant operator and not automatic;

·         We support harmonisation of the standard settlement period for equities and related products.  However, trading outside organised order books should be left flexible so that the counterparties can negotiate the appropriate settlement period.

LSEG submission to EC Consultation on CSDs(pdffile pdf - 77 KB)

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