Chapter 2. The Intermediated System in the European Union
Despite a long period of aspiration to establish a single integrated European financial market since 1966, when the Segré Report was published, the European Union (“EU”) has not fulfilled the goal of market integration yet. Thus, the EU post-trading sector, the main subject area of the intermediated system, is also still to a large extent fragmented, without a harmonised acquis communautaire for European intermediated systems. This does not mean, however, that there has been no effort or progress for reform with respect to the integrated European financial market, including the intermediated system. It can be said that the most influential initiatives for reform started with the Financial Services Action Plan (“FSAP”) and the Committee of Wise Men’s report (“Lamfalussy Report”), and that more specifically, inter alia, the Giovannini Group’s reports (“Giovannini Reports”) have rolled out a roadmap to tackle the problems of the European securities clearing and settlement regime. Based on these initiatives, European legislation and progress for market integration have been made. In relation to the intermediated system, the following Directives are worth noting: the Settlement Finality Directive in 1998, the Financial Collateral Directive in 2002, the Insolvency Regulation in 2000, the Winding-Up Directive in 2001, the Directive on Markets in Financial Instruments (“MiFID”) in 2004, and the Shareholders’ Rights Directive in 2007. Most recently, the Commission is preparing a Draft Directive on Legal Certainty of Securities Holding and Transactions (Securities Law Directive), which is scheduled to be concluded by the end of 2012.