The code of conduct on clearing interoperability was agreed by securities markets participants under the threat of legislation from the EC, which was concerned about the high costs of share trading across European borders.

But according to a Reuters report, none of the applications made for interoperability and mutual access to exchanges, clearing houses and settlement platforms has resulted in a live connection.

David Wright, director of the EC's internal markets unit, told delegates at a conference in Nice, France, that the code "has done a good part of the job" but interconnectivity still hasn't happened.

He said as soon as the interconnectivity agreements happen "then we can see real change in prices, quality and delivery".

Wright also pointed out that the introduction of mandatory measures could still be an option for the EC and EU finance ministers.

LCH.Clearnet was one of the first to test the voluntary code in 2007 when it issued formal requests to both Deutsche Börse and Borsa Italiana for full interoperability with Eurex Clearing and Cassa di Compensazione e Garanzia respectively.

The link ups would enable market participants to consolidate clearing of cash equities traded on four separate European markets - LSE, virt-x, Deutsche Börse and Borsa Italiana - at LCH.Clearnet.

But the London clearing house has hit major barriers in Italy and Germany as regulations in those markets are thought to require LCH.Clearnet to set up a local bank in order gain access to local markets.

LCH.Clearnet chairman, Chris Tupker, told Reuters reporters that barriers have to be broken down and the firm has told EC officials what's wrong but nothing has been done about it.

Earlier this year LCH.Clearnet temporarily blocked SIS x-clear from accessing the London Stock Exchange's equity business in protest at the barriers it is facing in Germany and Italy.

A working group at the European Commission recently published proposals for the creation of a harmonised legal framework within the Union, aimed at dismantling artificial legislative barriers to cross-border services.

In further news, reports say that the EC will publish prices charged by clearing and settlement houses for cross-border share trades in a bid to drive down fees.

Wright told delegates at the Nice conference today that clearing and settlement prices would be published on the EC's Web site by the end of the year.

EU says cost of share clearing still too high - Reuters
EU executive to shine light on share trading costs - Reuters