The European Central Securities Depositories Association (ECSDA) has established a dedicated working group in an effort to meet the demands of the Giovannini Group of financial experts for low-cost cross-border settlement.
Reporting in April, the Giovannini Group laid out a three-year plan for the removal of 15 barriers hindering the creation of an integrated clearing and settlement system for European securities trades. It tasked ECSDA with direct responsibility for overcoming three of the market barriers identified, relating to harmonisation of operating hours and settlement deadlines, intraday settlement finality and corporate actions processing.
ECSDA says work has already commenced on the first two barriers with the compilation of an inventory showing the differences in market practices and the drafting of a first set of recommendation for achieving harmonisation. The Association says it will issue its first update on progress in Q1 2004 and invite feedback on the outline recommendations from members.
The first stage of work on corporate actions processing is expected to be finished by the end of the Q2 2004, with recommendations available for consultation by the final quarter.
ECSDA has also agreed on a closer cooperation with CEECSDA (Central and Eastern European Central Securities Depositories Association) with respect to the forthcoming EU enlargement. A first joint round table conference was held in Paris last month in order to identify potential areas of cooperation.
Other issues beyond harmonisation proceedings under discussion include the preparation of a joint answer to the ESCB CESR consultative report on 'Standards for Securities Clearing and Settlement Systems in the European Union', and analysis of the interaction of securities settlement systems with the planned future Target 2 payment system.