The Lithuanian Presidency has on December 18 in Brussels reached a preliminary political agreement with the European Parliament on the Regulation on improving securities settlement in the EU and on central securities depositories, pending technical finalisation.
“Regulation on central securities depositories is an important tool in strengthening the safety and credibility of European financial system and for establishing common rules for systemically important market infrastructures at European level. This will increase the overall market transparency and facilitate the movement of capital, which is one of the core values of the European Union” – said Lithuanian Finance Minister Rimantas Šadžius, the Chair of ECOFIN Council.
The proposed Regulation will complete the regulatory framework for securities market infrastructures by increasing safety in the financial system, opening the market for CSD services and improving the efficiency of securities settlement.
Both the agreement among the Member States in the Permanent Representatives Committee (Coreper II) and between the Council and the European Parliament have been reached during the Lithuanian Presidency.
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. It 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.