Parliament advises on procedures for share transactions

The Parliament’s Economic and Monetary Affairs Committee has adopted a report setting out measures for the improvement of clearing and settlement in the EU.

The issue is how to improve the procedures whereby shares are bought and sold across borders within the EU. At present, national rules are very different, leading to excess costs and competitive distortions in the EU market for share transactions. The Commission, although it recognised the problems in a 2004 
communication
, has not yet proposed legislation in the area (see EURACTIV 3 Feb 2005).

The report, by Finnish MEP Piia-Noora Kauppi adopted by Parliament on 6 July 2005, was an ‘own-initiative’ report and, although influential, does not lobby for a directive. Rather it sets out provisions which would be necessary should legislative measures be taken. It suggests fair access to central clearing systems, improved transparency, consistency of regulation, proper management of risks and removing distortions of competition.

The report will be taken into account by the Commission in deciding whether to legislate, together with the existing recommendations of the 2003 
Giovannini
report which identified 15 barriers to the efficient working of the system across EU borders. 

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