A considerable amount of work on post-trade issues was done at European level in 2009.
The financial crisis has demonstrated the need to strengthen regulation of back office activities both for cash and for over-the-counter derivatives.
The working group replied to various consultations initiated by either the European Commission or CESR/ESCB on standards applicable to clearing and settlement infrastructure.
Similarly, the working group closely followed all the debates on setting up CDS clearing houses.
At the domestic level the Group was actively involved in work to harmonise the processing of fixed income securities (i.e. quoting debt at face value) with the aim of successfully implementing the reform as quickly as possible while putting in place a procedure to avoid processing disruptions.
The group was also involved in the AMF’s work on changes to the terms of reference for custody account-keepers on the subject of flow accounts.
The year 2010 will be crucial year for the European post-trade industry. The EU has launched a debate on the regulation of clearing and settlement.
Regulating these activities is now one of the Commission’s major objectives as it seeks to learn lessons from both the financial crisis and the failure of the prevailing free-market ethos epitomised by the Code of Conduct on Clearing and Settlement.
Two European statutes are currently in preparation: legislation on market infrastructures and over-the-counter derivatives markets, and the Securities Law Directive. Despite major shortcomings in both texts, the Commission’s change of stance on this issue is a major and necessary step forward for the integration and security of Europe’s financial markets.