European central securities depositories have so far implemented a third of the standards required to meet Giovannini reforms for improved clearing and settlement, but can offer no guarantees about full implementation in the near future.
In April 2003, the Giovannini group charged the European Central Securities Depository Association (Ecsda) with implementing reforms to address three barriers to low cost cross-border settlement.
A year later and a dedicated Ecsda working group had agreed ten standards designed to eliminate two of the three barriers, relating to operating hours and settlement finality. The third barrier on corporate actions processing is the subject of a separate task force which is expected to report back within the next three months.
In a status report issued today, the Association says that a third of the necessary changes needed by member CSDs have been made. The report identifies these cases and documents reasons why implementation has not yet been possible in other cases.
Ecsda warns that full implementation in all markets in the short term is far from certain as depositories prioritise internal projects
Joel Merere, chairman of Ecsda comments: "It is important that all security settlement systems implement the standards as quickly as possible to ensure full benefits are obtained."