This is the season for pollen, Spring holidays and roadmaps from key industry players. Often the new roadmaps mean that some may no longer be on the journey.
However, in this case, the Association for Financial Markets in Europe (AFME), a trade group for Europe’s wholesale financial markets, is pushing for a roadmap that will advance European post-trade reforms. The post-trade division of AFME issued a white paper, “A Roadmap for Integrated, Safe and Efficient Post Trade Services in Europe,” to dive into the issue and provide goas for public authorities and the industry.
The paper covers:
- A sound legal basis for cross-border holdings in book entry securities;
- An efficient method of reclaiming withholding taxes;
- Ensuring open access and interoperability for European CCPs;
- Pushing for collateral management that is “harmonized and unencumbered by unnecessary restrictions;”
- And “the process of fully embedding T2S as a low cost, pan-European settlement platform.”
European post-trade reform is needed “if we are to build larger and more diverse capital markets in Europe,” says Stephen Burton, managing director of Post Trade at AFME, in a statement.
“While the solutions put forward to date are necessary, they have not gone far enough in addressing the barriers to efficient post trade. In order to make progress towards an integrated, low-risk and low-cost post-trade eco-system in Europe, European and national authorities should prioritize reform,” Burton says. “The overarching goals of post trade reform are well-established, the mandate and the foundations have been clearly set, now it’s time for action.”
The white paper’s authors delve into the “opportunities created by new technologies. With the advent of new technology, such as Artificial Intelligence, cloud-based applications and distributed ledger technologies, there is the potential to revolutionize how post trade services are delivered,” according to AFME. “The consequence for industry of not developing common standards and collectively maximizing its benefits could be further fragmentation. Therefore, the paper calls for industry to work collaboratively on this.”
The people at AFME are clear on their vision of “truly integrated, harmonized, low-risk and low-cost” post-trade infrastructures and service providers existing “in a harmonized and standardized operational, legal and regulatory environment offering innovative and low-cost services to all users on a non-discriminatory basis.”
Yet AFME acknowledges that major changes must take place to achieve this vision such as:
- “The barriers determined by the European Post Trade Forum (EPTF Barriers) in 2017” have to be “dismantled in the context of the European Commission’s Capital Markets Union project (CMU);”
- “A longer-term strategy, based on detailed analyses, to achieve the targeted future state of the post-trading landscape to be developed, including responsibilities and timelines, and to be implemented accordingly;”
- “The opportunities created by new technology should be leveraged;”
- “Close and institutionalized cooperation between the public and the private sector should be continued, including an intensified dialogue with European and national public authorities in a bespoke and targeted manner;”
- And “post-trade reform should be pursued across all European markets, including non-E.U. capital markets.”
You can dive into the full report here http://bit.ly/2xtavGe .
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