The European Union internal market commissioner Charlie McCreevy has warned the securities industry that it must do more to cut costs for cross-border EU trading or face regulation on clearing and settlement.
McCreevy told a conference in Luxembourg that what is needed is a more liquid pan-European market with lower costs for all: "Cross-border trading remains expensive, sometimes prohibitively so. Cross-border clearing and settlement costs can still be up to six times more than those of domestic settlements...We are talking about big money."
In his speech, McCreevy says the Commission is taking a close look at the economic case for action and will decide whether any European legislation, or other intervention, is necessary on that basis and in the light of developments in the market: "The next six months are crucial. As far as I am concerned, the clock is ticking."
McCreevy says the time has now come for "all interested actors to take their responsibilities and collectively put their foot on the gas".
He also noted that some market participants back the creation of consolidated clearing structures in the EU, such as a single pan-European Central Counterparty (CCP).
"At face value, this is an interesting prospect," says McCreevy. "I can see that there could indeed be cost savings and improved efficiencies. If so, everyone should, of course, get a share of the benefits."
The European Commission said earlier this year that it had received widespread support for its plans to improve pan-European securities clearing and settlement, which include the possible introduction of legislation.