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Securities clearing and settlement


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, 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 UK-based CCPs to the EU is a long-standing issue in the post-Brexit context with around 90% of cleared euro swaps still handled in the UK. A comprehensive assessment conducted by ESMA identified 3 UK-based clearing services as being of substantial systemic importance for the EU. However at this stage the cost of derecognising these services has been considered as superior to the possible financial stability benefit and the temporary equivalence decision concerning UK-based CCPs was extended for 3 years. In parallel the European Commission has launched a consultation on how to improve the competitiveness of EU CCPs, aiming to make the EU a more attractive place to clear. The consultation considers both the supply side (e.g. how to make it easier and quicker for EU CCPs to offer new products) and the demand side( e.g. how to develop the demand for clearing services in the EU).

In the settlement space a proposed review of the CSD Regulation (CSDR) was published in March 2022. Its objective is 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.
A further evolution is the implementation of new technologies such as DLT, which is gathering pace and has the potential to significantly reshape post-trading activities with further efficiency and integration. Many issues however remain in terms of scalability and interoperability of DLT systems that the recently proposed DLT pilot regime aims to help address. Finally, although significant efforts have been made in terms of technical harmonisation with the implementation of CSDR and TARGET2-Securities, legal and fiscal rules remain fragmented. A targeted harmonisation of the corporate insolvency framework was proposed in the latest CMU action plan published in September 2020.

Contributions to the policy debate

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

Public and private
sector views

Clearing policy priorities - February 2022 new

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 new

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

Denis Beau - Banque de France | Fiona Van Echelpoel - European Central Bank | Dirk Schrade - Deutsche Bundesbank | Barbara Lupi - Banca d’Italia | James Cunningham - BNY Mellon | Ilse Peeters - Euroclear S.A.

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

Jochen Metzger - Deutsche Bundesbank | Niels Brab - Deutsche Börse Group | Guillaume Eliet - Euroclear S.A. | Swen Werner - State Street Bank and Trust | Alex Dockx - JPMorgan | Francisco Béjar - Iberclear | Hélder Rosalino - Banco de Portugal