We have heard an interesting discussion on the legal initiatives currently being undertaken at EU level to remove the barriers that are hindering the single market objectives. MiFID is being revised to increase investor protection and improve the functioning of EU capital markets. EMIR entered into force in summer 2012, requiring standard derivative contracts to be cleared through central counterparties and establishing stringent organisational, business conduct and prudential requirements for central counterparties. The European Commission’s  BIS central bankers’ speeches  1  proposal for a CSD Regulation improving securities settlement is under scrutiny by the EU legislators; it will enhance the legal and operational conditions for cross-border settlement in the Union in general, and a strong emphasis has been placed today on the importance of its timely adoption. I noted that the majority of the audience saw the need to adopt the CSD Regulation at the latest by the start of 2014, also with a view to allowing sufficient time for the technical standards. The representatives from the Parliament and the Commission have highlighted the importance and feasibility of this objective. Finally, another initiative is in the pipeline to harmonise the securities law legislation, establishing an EU-wide framework for the ownership of securities and increasing legal certainty in cross-border environments. Combined, the review of MiFID, the EMIR, the CSD Regulation and the securities law legislation are consistently building a harmonised legal framework for the whole securities transaction chain – from trading to clearing to settlement.

Important progress is also being made at the operational and business levels. The most notable example mentioned by many today is T2S, a project with huge potential for market integration. T2S will enable the participating CSDs to focus on value-added services while the basic settlement service is provided via the single T2S platform. T2S will thereby make it easier for business to move from one CSD to another. The actors that harmonise in T2S have a greater chance of reaping the full benefits of T2S and widening their business. Conversely, the European CSDs that do not harmonise may see the securities issued via their CSD being settled predominantly in another CSD participating in T2S. An area of opportunities mentioned several times by speakers today is collateral management. Some of the regulatory initiatives I mentioned before, aiming to enhance safety in financial markets, are generating greater demand for high-quality collateral. At the same time, the crisis is making this collateral scarcer: there has been a shift from unsecured to secured funding and greater recourse to central bank liquidity. The increased demand for collateral is prompting market participants as well as the Eurosystem to develop innovative ways to make better use of existing collateral, i.e. to make assets more easily available, when and where they are needed. Harmonisation in this area is crucial to facilitate the efficient mobilisation of collateral across Europe. Examples are the auto-collateralisation functionality that will be offered by the T2S platform and the several initiatives underway to establish tri-party settlement interoperability.