The European Central Securities Depositories Association (ECSDA) has called for the European Central Bank (ECB) to postpone plans to implement an integrated securities settlement system in the euro zone until it is known how the platform will be governed and operated.
According to a Financial Times report ECSDA, which is a trade association of 42 settlement bodies, has written to the ECB ahead of a meeting later this month where the central bank will decide whether to implement an integrated settlement infrastructure, dubbed Target2-Securities.
The system would connect all clearing networks in the euro zone into a single platform, extending the payments system used for central bank operations to cover securities settlements.
The ECB said last month that it believes an integrated securities settlement system in the euro zone could cut settlement costs by up to 90%. But such a scheme would supplant services currently provided by securities depositories, such as Clearstream and Euroclear, and many other ECSDA members.
The lobbyist has queried the cost saving estimates of the ECB and expressed concerns about governance issues. In particular, the group is concerned about whether use of the ECB system will be mandatory or volunatry.
ECSDA has called for a year or more of further study and consultation before a decision is reached, says the FT report.