EU clearing mandate likely, warns Aite

European central counterparties (CCPs) must work together to make securities clearing and settlement cheaper and more efficient, or risk a European Commission (EC) mandate, according to the latest report from consultancy Aite Group.

The report, ‘EU trading, clearing and settlement: You say you want a revolution’, considers national differences between systems and management to be the key barriers to a harmonised pan-European clearing and settlement market. The report adds that regulatory variations between countries within the EU, such as tax codes, legal structures, currencies (outside the Euro currency zone) and settlement standards also prohibit interoperability between markets, clearing houses and central security depositories.

Three years after the introduction of its Code of Conduct on clearing and settlement, “many feel that the EC may be ready to issue a more forceful directive soon if participants in the market do not get the ball moving more quickly,” asserted the report.