EU to Tighten Securities Settlement System

(CN) - EU Council leaders announced plans Wednesday to make Europe's securities market safer and more transparent.

The Permanent Representatives Committee - a ministerial body made up of a single representative from each of the EU states - said the bill will require that all transferable securities be represented in book-entry form and recorded with a central securities depository before being traded on the open market.

Securities settlement systems in the EU processed over $1.2 quadrillion in securities transactions in 2010, and held $52 trillion by the end of that year. Nearly every European country operates a central securities depository, each with a different set of rules and settling requirements - something the bill aims to change.

The plan "harmonizes settlement periods and settlement discipline regimes across the EU and introduces a common set of rules inspired by international standards addressing the risks of the depositories' operations and services," the council said in a statement.

Council president Dalia Grybauskaite of Lithuania will negotiate the bill's approval with the European Parliament. The council said the law must be in place by 2015 for other regulatory devices to begin as planned.

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