Towards harmonisation in Europe

The work of the T2S Advisory Group and the T2S Harmonisation Steering Group concentrates on practical solutions and agreed practices to maximise the benefits of a single settlement engine. It does not (and cannot) aim at removing on its own the national, legal and regulatory barriers that currently characterise the EU post-trade industry (as described by the Giovannini Group). The T2S harmonisation activities complement the measures taken by the industry and the authorities as well as the definition of standards and regulations across the EU.

The regulatory initiative that has the greatest impact of T2S is the CSD Regulation (CSDR), which will establish a regulatory framework for securities settlement and CSDs at the EU level. The CSDR will strongly improve the legal environment in which CSDs will operate in T2S, fostering harmonisation and improving the competitive environment for CSDs. The CSDR includes harmonisation provisions regarding the single settlement period, a single settlement discipline regime, the legal issues on CSDs’ outsourcing of settlement services to public entities, and market access rules and free choice regarding the place of issuance of securities. More information on the reasons why the CSDR is important for T2S can be found in the letter sent by the T2S Advisory Group to the Commission on 13 July 2011.

The legal environment for CSDs in T2S will also benefit from the harmonisation of the rules applicable to the transfers of securities that the future EU securities law legislation is expected to bring about.

To ensure coordination and direct communication between T2S and the other harmonisation forums in Europe, the T2S Advisory Group includes representatives from the European Commission, the European Securities and Markets Authority (ESMA), and the Association for Financial Markets in Europe (AFME).

Similarly, T2S representatives have always contributed to the work of the EU groups and forums pursuing post-trade harmonisation. In the past, T2S has participated in the work of CESAME2 and in the Expert Group on Market Infrastructures (EGMI). Since 2012, T2S has been part of the secretariat of the European Post Trade Group (EPTG). The EPTG focuses on post-trade harmonisation items that are currently not covered by other public authority initiatives like T2S and the CSDR. These items include, among others, the work on cross-border shareholder transparency and pre-settlement procedures (e.g. trade confirmation, allocation and time of matching). See EPTG Annual Report 2013.

Useful links on post-trade harmonisation in the EU: