Opinion of the European Monetary Institute on a consultation from the Swedish Ministry of Finance under Article 109f (6) of the Treaty establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI as elaborated in the Council Decision of 22nd November 1993 (93/717/EC) on a draft proposal for the amendment of legislation concerning clearing and settlement operations (CON/95/18)
Date: 1996-01-30
Institutions: European Monetary Institute
Subjects: Sweden, financial instrument, financial stability, national law, payment system

OPINION OF THE EUROPEAN MONETARY INSTITUTE

on  a  consultation  from  the  Swedish  Ministry  of  Finance  under  Article  109f  (6)  of  the  Treaty

establishing  the  European  Community  (the  “Treaty”)  and  Article  5.3  of  the  Statute  of  the  EMI  as

elaborated  in  the  Council  Decision  of  22nd  November  1993  (93/717/EC)  on  a  draft  proposal  for  the

amendment of legislation concerning clearing and settlement operations.

CON/95/18

1.

The  present  consultation  was  initiated  on  28th  November  1995  by  the  Swedish  Ministry  of

Finance which requested an opinion by the end of January 1996.

2.

The  EMI’s  competence  to  deliver  an  opinion  is  based  on  Article  1,  section  1,  fourth  and  fifth

indents,  of  the  Council  Decision  of  22nd  November  1993  /93/717/EC)  as  the  draft  legislation

concerns clearing and settlement operations, particularly in the field of payments and securities,

and includes provisions aiming to enhance the stability of financial institutions and markets.

3.

At  present,  statutory  provisions  on  clearing  operations  in  Sweden,  as  laid  down  in  the  Act

governing  Securities  Exchanges  and  Clearing  Operations,  apply  only  to  the  clearing  of  options

and  futures.    The  above  draft  legislation  aims  at  an  extension  of  these  provisions  to  other

clearing operations and, in particular, at the introduction of compulsory authorisation for clearing

operations involving equity, bonds, other financial instruments and payments including payments

in  foreign  currencies.    Such  authorisation  must  be  obtained  from  the  Swedish  Financial

Supervisory Authority which, inter alia, assess the soundness of clearing and settlement systems,

their  capitalisation,  the  level  of  safety  standards  and  the  existence  of  risk  management  plans.

The draft legislation also includes provisions on participation in clearing and settlement systems,

the liability of its operators and adaptations of Swedish legislation as a result of the Investment

Services Directive.  The draft legislation is based on principles of free access, equal treatment

and  uniform  application  to  operations  of  a  similar  kind,  whilst  it  takes  account  of  recent

developments in the financial markets in areas such as netting.

4.

The EMI welcomes the draft legislation as its enhances the soundness of clearing and settlement

systems in Sweden and thus the stability of financial markets and institutions.  The EMI supports

in  particular  the  attention  which  is  paid  in  the  draft  legislation  to  matters  such  as  compulsory

authorisation by a public authority for the operation of and participation in clearing and settlement

systems, 

safety 

standards, 

a 

clear 

division 

of 

responsibilities 

and 

liabilities,

- 2 -

- 3 -

netting,  uniform  application  of  statutory  provisions  to  clearing  operations  of  a  similar  kind  and

principles  of  free  access  and  equal  treatment.    The  EMI,  having  reviewed  the  draft  legislation

itself,  was  not,  however,  in  the  position  within  the  limited  time  available  to  assess  the  impact

thereof on the various laws which the draft legislation aims to amend.

5.

The EMI agrees that this opinion may be made public by the competent  Swedish  authorities  at

their discretion.

30th January 1996