EU eyes competition law to cut share trading costs

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Typically it costs more to settle a cross-border trade in the EU than a purely domestic transaction, posing an obstacle to the Union's efforts to create a cheaper and more seamless single capital market for investors.

The European Commission has already agreed a code of conduct with share trade clearing and settlement operators to boost competition in the sector and bring down the cost of cross-border transactions.

And the code provides for clearers and settlement houses to link up, with a view to making it easier for dealers and investors to use any trading platform regardless of clearance and settlement arrangements.

But while over 80 applications have been made between operators for new links so far none has come to fruition.

Consequently EU finance ministers meet next Tuesday and will formally conclude that "more progress is needed on effective unbundling of services and accounting separation, as well as on access and interoperability based on sound business cases", a draft conclusion of the meeting said.

Typically officials from EU member states agree conclusions on issues ahead of the relevant ministerial meeting.

Ministers are also expected next week, according to the draft document, to agree that, "public authorities may contribute to the swift and full implementation of the code, including by pursuing an active competition policy in this area".

ECB SUPPORT

Ministers are also set to give conditional support to the European Central Bank's proposed Target 2 Securities project to build a single securities settlement platform for the single currency euro zone.

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