Securities clearing and settlement

Context

The EU securities framework was completed following the 2008 financial crisis with a set of legislations aiming to improve the safety and efficiency of capital markets and covering clearing and settlement activities (EMIR, CSDR, CCP recovery and resolution framework) and securities financing transactions (SFTR). Rules have also been implemented at the international level in these areas notably with the IOSCO PFMIs. Some issues are however still pending.

How to mitigate the potential risks posed by offshore CCPs to the EU is a long-standing issue in the post-Brexit context with around 90% of cleared euro swaps handled outside the EU. A review of the EMIR 2 framework (EMIR 3) proposed a strengthening of EU clearing in three main areas. First, an enhancement of the competitiveness of the EU clearing ecosystem with measures to streamline administrative procedures and to better reflect the risk-reducing role of CCPs in counterparty credit risk. Second, an improvement of the safety and resilience of the EU clearing ecosystem in the perspective of an increase of EU clearing volumes, with enhanced supervision of EU CCPs and a reinforced EMIR framework. Third, a requirement for EU market participants to clear a portion of substantially systemic products through active accounts at EU CCPs.

In addition, following the stress experienced by some market participants in 2022 in meeting their margin calls for energy derivatives, the Commission included in the EMIR 3 proposal a set of measures to tackle the main sources of stress observed in the energy markets.

The measures proposed include improving the transparency of CCP margin models, broadening CCP eligible collateral in line with the temporary measures put in place during the energy crisis and reviewing requirements to be met by non-financial firms participating in CCPs. Work is also underway at the EU and international levels to address margin procyclicality issues.

In the settlement space amendments adopted to the CSD Regulation (CSDR Refit) aim to ensure more proportionate and effective rules in order to reduce compliance costs and regulatory burdens for CSDs, facilitate their ability to offer a broader range of services cross-border, and also improve their cross-border supervision.

Harmonisation work is also continuing in the post-trading space. A targeted harmonisation of the corporate insolvency framework was proposed in December 2022 in the context of the latest CMU action plan, as well as an enhancement of withholding tax procedures. Discussions are also underway at the European and international levels around settlement efficiency and the opportunity of shortening settlement cycles and moving towards T+1. New technologies such as DLT, cloud computing and AI also have the potential to significantly reshape post-trading activities with further efficiency and integration, although many issues remain to be addressed in terms of scalability and interoperability.

Eurofi documents

Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)

Klaus Löber - European Securities and Markets Authority (ESMA) | Danuta Hübner - European Parliament | Giuseppe Grande - Banca d’Italia | Isabelle Girolami - London Stock Exchange (LSEG) | Eric Tim Müller - Eurex Clearing AG | Stéphane Giordano - Société Générale

Post-trading roadmap - February 2024 new

Fiona Van Echelpoel - European Central Bank (ECB) | Montserrat Martínez Parera - Spanish Securities and Exchange Commission (CNMV) | Philippe Laurensy - Euroclear Group | Jesús Benito - SIX Group & Chief Executive Officer - Iberclear | Valentino Wotton - The Depository Trust & Clearing Corporation (DTCC) | Haroun Boucheta - BNP Paribas

Securities post-trading infrastructures: efficiency and resilience - September 2023

Denis Beau - Banque de France | Fiona Van Echelpoel - European Central Bank (ECB) | Julian Reischle - Deutsche Bundesbank | Piero Cipollone - Banca d’Italia | Haroun Boucheta - BNP Paribas | Ilse Peeters - Euroclear SA/NV | Michalis Sotiropoulos - Depository Trust & Clearing Corporation (DTCC)

Enhancing central clearing in the EU - September 2023

Klaus Löber - European Securities and Markets Authority (ESMA) | Piero Cipollone - Banca d’Italia | Fiona Van Echelpoel - European Central Bank (ECB) | Eva Wimmer - Federal Ministry of Finance, Germany | Julien Jardelot - London Stock Exchange Group (LSEG) | Erik Tim Müller - Eurex Clearing AG | Stéphane Giordano - Société Générale | Patricia Bogard - Crédit Agricole Corporate & Investment Bank

Openness is essential for the development of attractive European capital markets - September 2023

Daniel Maguire - LCH

Impacts of digitalisation on trading and post-trading - April 2023

Carlo Comporti - Commissione Nazionale per le Società e la Borsa (CONSOB) | Claudine Hurman - Banque de France | Julian Reischle - Deutsche Bundesbank | Roland Chai - Nasdaq | Jennifer Peve - The Depository Trust & Clearing Corporation (DTCC) | Arnaud Misset - CACEIS | Lawrence Low - Standard Chartered

Strengthening EU clearing - April 2023

Klaus Löber - European Securities and Markets Authority (ESMA) | John Berringan - European Commission | Claudine Hurman - Banque de France | Daniel Maguire - LCH | Erik Tim Müller - Eurex Clearing | Haroun Boucheta - BNP Paribas | Giuseppe Grande - Banca d’Italia | Suyash Paliwal - US Commodity Futures Trading Commission (U.S. CFTC)

Competitiveness and resilience of EU infrastructures - September 2022

Strengthening EU clearing - September 2022

Klaus Löber - European Securities and Markets Authority | Pamela Dejmek-Hack - European Commission | Julian Reischle - Deutsche Bundesbank | Daniel Maguire - London Stock Exchange Group | Erik Tim Müller - Eurex Clearing | Christophe Delafontaine - BNP Paribas | José Manuel Ortiz - SIX

Clearing policy priorities - February 2022

Klaus Löber - European Securities and Markets Authority | John Berrigan - European Commission | Segal-Knowles - Bank of England | Julian Reischle - Deutsche Bundesbank | Claudine Hurman - Banque de France | Isabelle Girolami - LCH Limited | Erik Tim Müller - Eurex Clearing AG | Haroun Boucheta - BNP Paribas Securities Services

DLT in securities markets - February 2022

Natasha Cazenave - European Securities and Markets Authority | Birgit Puck - Austrian Financial Market Authority | Jérôme Reboul - Autorité des Marchés Financiers | Sarah Pritchard - Financial Conduct Authority | Jennifer Peve - The Depository Trust & Clearing Corporation | Isabelle Delorme - Euroclear S.A. | Daniel Kapffer - DekaBank Deutsche Girozentrale

Clearing: remaining challenges and way forward - September 2021

Klaus Löber - European Securities and Markets Authority | Paulina Dejmek Hack - European Commission | Nathalie Aufauvre - Banque de France | Daniel Maguire - LCH Group, London Stock Exchange Group | Erik Tim Müller - Eurex Frankfurt AG

Post-trading priorities - September 2021

New technologies in securities markets - September 2021

Jochen Metzger - Deutsche Bundesbank | Birgit Puck - Austrian Financial Market Authority | Robert Ophèle - Autorité des Marchés Financiers | Sven Werner - State Street Bank and Trust | Emmanuel Aidoo - Credit Suisse | Berta Ares - BME Inntech | Janin Stéphane - AXA Investment Managers

Securities and derivatives clearing - April 2021

Klaus Löber - European Securities and Markets Authority | Jochen Metzger - Deutsche Bundesbank | Nathalie Aufauvre - Banque de France | Daniel Maguire - LCH Group and LSEG | Haroun Boucheta - BNP Paribas Securities Services

Securities post-trading - April 2021

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