ECSDA’s call for action on Europe’s Capital Markets Competitiveness
Today, 22 July 2024, ECSDA released its Call for action on Europe’s Capital Markets Competitiveness.
As the EU begins a new political cycle, ECSDA reaffirms its continued support for the further development and revitalisation of the Capital Markets Union (CMU). As Financial Market Infrastructures offering key services to issuers, investors and securities markets, Central Securities Depositories (CSDs) play an integral role in creating a more integrated, efficient and competitive EU capital market.
A number of key reports (Eurogroup, Letta, Draghi, Noyer and ESMA) entail important elements to lay the foundation for the next EU legislative agenda. They also include key recommendations on increasing the attractiveness of the European capital markets for issuers and investors and deepening the liquidity in the region.
ECSDA supports some of the recommendations related to post-trading and agrees that post-trade activities could be more efficient but questions others, especially on solutions for integrating the post-trade. This topic is not new, but a renewed reflection of its relevance may be warranted.
Below, ECSDA identifies some measures that could further strengthen Europe’s capital markets integration and growth from a post-trade perspective. Key elements that continue to act as material barriers to market integration and fragmentation include for instance securities law, market specificities and tax procedures. The EU should therefore rather improve the current realities to empower private sector CSDs to drive natural integration and consolidation via fair cross-border competition. In our view, the European Capital Market deeply benefits from its CSD competitiveness.
In this document, ECSDA provides its views and recommendations on:
- the role of CSDs in supporting market integration;
- the root causes of post-trade fragmentation;
- the impact of forcing further consolidation without addressing the root causes of fragmentation;
- the way forward to achieve further integration.