In February 2016, the European Commission created a European Post-Trade Forum (EPTF) to assess the evolution of the EU post-trade landscape and progress in removing barriers. The EPTF has today published its report.
On the back of releasing the report, the EC has launched a consultation on further reducing barriers to post trade services across financial markets, focusing on how to improve services used in financial transactions, including clearing, settlement and collateral management. The EC is currently reviewing progress made in removing barriers to post-trade market infrastructure as part of the Capital Markets Union Action Plan.
The consultation seeks to gather views on a range of issues including the current state of post-trade markets, the main trends and challenges faced by post-trade services providers and users as well as the best ways to remove barriers, including through financial technology. On average, cross-border trades remain more expensive than domestic trades and a more efficient post-trading environment could reduce such costs.
Commenting on the report, the Association for Financial Markets in Europe said in a statement that the following barriers should be given the highest priority for resolution:
• EPTF Barrier 12: Inefficient withholding tax collection procedures – a barrier to efficient cross-border investments
• EPTF Barriers 8, 9, 10, 11: Legal inconsistencies and uncertainties – a barrier to a successful capital market union
• EPTF Barrier 1: Fragmented corporate actions and general meeting processes – a risk that successful barrier dismantling work is jeopardized by renewed fragmentation
• EPTF Barrier 4: Inconsistent application of asset segregation rules – providing for safety and efficiency through harmonization
• EPTF Barrier 5: Lack of harmonization in registration and investor identification rules and processes – an obstacle to cross-border securities investment and issuance
• EPTF Barrier 6: Complexity of post-trade reporting structure – an obstacle to making the EU an attractive investment destination