Brussels,

Post trade services​

Post-trade services encompass the clearing, settlement, and custody of securities transactions, which are crucial for the efficient functioning of capital markets. The EU has implemented several initiatives to enhance the efficiency, safety, and integration of post-trade services across member states.

Key EU Regulations and Initiatives
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  1. Financial markets infrastructure policy
    1. Objective: Enhance the resilience of market infrastructure and to achieve an integrated, safe and efficient post-trade environment in the EU
    2. Key Provisions: check the following items
  2. European Market Infrastructure Regulation (EMIR) - Derivatives
    • Objective: Increase transparency in the over-the-counter (OTC) derivatives market and reduce systemic risk.
    • Key Provisions:
      • Mandatory central clearing for certain classes of OTC derivatives.
      • Reporting requirements for all derivatives to trade repositories.
      • Risk mitigation techniques for non-centrally cleared OTC derivatives.
  3. Recovery and resolution of central counterparties (CCPs)
    1. Objective: CCPs play an increasingly major role in the financial system. They increase market transparency and reduce risks, in particular in derivatives markets.
    2. Key Provisions:
      • Crisis Management Framework
      • Protection of Taxpayers:
  4. Central Securities Depositories (CSDs)
    • Objective: Harmonize the settlement of securities across the EU and ensure the robustness and efficiency of central securities depositories (CSDs).
    • Key Provisions:
      • Establishes common standards for settlement and CSDs.
      • Introduces a settlement discipline regime, including measures to prevent settlement fails and penalties for late settlement.
  5. Securities Financing Transactions (SFTs)
    • Objective: Increase transparency of securities financing transactions (SFTs) such as repurchase agreements and securities lending.
    • Key Provisions:
      • Requires reporting of SFTs to trade repositories.
      • Ensures transparency to investors on the use of SFTs by investment funds.
  6. Settlement finality
    • Objective: Minimise the risks associated with the transfer of financial instruments and payments
    • Benefits:
      • Streamlines the settlement process by harmonizing technical and regulatory standards.
      • Reduces cross-border settlement costs and risks.
  7. Financial collateral arrangements
    1. Objective: Give a EU legal framework for the use of securities and cash as collateral in financial transactions.
    2. Key Provisions:
      • A standardized legal framework across EU member states, facilitating the cross-border use of financial collateral
      • Abolishment of many formal requirements, such as the need to register collateral
  8. Securities and claims ownership
    1. Objective: Harmonize conflict-of-laws rules for securities and claims ownership across the EU to enhance legal certainty, facilitate cross-border transactions, and promote market integration.
    2. Key Provisions:
      • Common Conflict-of-Laws Rules
      • Clarification of Applicable Laws