92001E3604

WRITTEN QUESTION E-3604/01

by Salvador Garriga Polledo (PPE-DE) to the Commission

(8 January 2002)

Subject: Integration of settlement systems

Financial experts have criticised the inefficiency of European clearing and settlement systems, although they have recommended that the initiative to modernise the systems be left to the markets.

Nevertheless, the time appears to have come to put an end to the fragmentation of a structure which is essential in order to integrate financial markets, given that it provides the framework for confirming the terms of a transaction, defining the obligations of each party to the operation, transferring the subject of the transaction to the purchaser and transferring the payment to the seller.

When, in the Commission's view, should the corresponding initiative be taken, which is currently necessary in order to remove the fiscal and regulatory barriers hindering the consolidation of the sector on the basis of three or four clearing systems?

Answer given by Mr Bolkestein on behalf of the Commission

(25 February 2002)

The Commission shares the view that without efficient, cost-effective clearing and settlement systems in Europe, the full benefit of an integrated financial market in Europe cannot be realised. In line with the conclusions of the Report of the Committee of Wise Men on the Regulation of Securities Markets, the Commission believes that the market should have the main role in shaping the outcome.

However, the Commission will produce a Communication on the subject of clearing and settlement in the next few months. This paper will set out Commission policy with respect to these important systems. It will take the form of a consultation document and will seek input from interested parties into the process of deciding whether and if so how the public authorities can most usefully intervene to assist in the establishment of a more efficient clearing and settlement landscape in the Community in the future.

The Giovannini Group of financial market experts will also be producing a further report on this subject later in the year.