European repo professionals have called on national and international securities depositories to co-operate on the development of solutions to harmonise settlement across the EU and cut the number of fails experienced by industry participants.
The appeal was made by the European Repo Committee, a group of market professionals supported by the International Securities Markets Association, following a recent meeting in Rome with representatives from Euroclear Bank, Clearstream, Clearnet and the London Clearing House.
The group identified the current fragmentation of settlement systems, the large number of depositories and the different timeframes within which each custodian operates as major factors in the relatively high level of settlement failures in the European securities markets.
The group also concluded that the rules and regulations of futures exchanges should be reviewed in order to accommodate the practical considerations of the clearing and settlement mechanisms.
The intervention comes as European securities depositories fall under increasing pressure to improve clearing and settlement arrangements and lower costs for investors.