With the lacklustre performance of European capital markets, and the EU’s capital markets union initiative to revive them, existing barriers to EU harmonisation in markets and their infrastructures have become – as BNP Paribas’ Camille Papillard puts it – a hype topic. Wednesday’s session on it in the Optic conference listed many things that the post-trade world can still do, but also many others that must be addressed on a higher political level – such as in harmonisation of tax, and securities law.

The fundamental role of a central securities depository is to act as a notary. But noting precisely what? As the magnifying glass has moved to remaining national barriers in post trade, a panel looked into the current state of the issue at AFME’s Optic conference on Wednesday. (Analysed famously by Alberto Giovannini for the European Commission around the millennium shift, then the “EPTF” report, the topic has been touched on by PostTrade 360° on occasions including this recent conference session.)

Speakers in the Optic session in London were …
Anna Kulik, Secretary General, ECSDA,
Camille Papillard, Head of Financial Intermediaries Client Line, EMEA, Securities Services, BNP Paribas,
Javier Ruiz del Pozo, Director, Secondary Markets Department, CNMV, and
Nick Titmus, Vice President, Product Management, Broadridge,
… in discussion led by James Cunningham, Senior Director, Public Policy and Government Affairs, BNY.

To BNP Paribas’ Camille Papillard, numbers speak: per-unit costs in the post-trade processing are higher in small European markets than it is in the larger ones such as France.

Against the first impression one could get that all is miserable, Anna Kulik introduced her standpoint by pointing out that “the glass is certainly half full”. Important progress has been made, both through purposeful regulation and efficiency moves by infrastructures such as CSDs themselves, with improved clarity on settlement finality having been a big achievement. Then, among the many not-yet-harmonised aspects, many “root causes” lie outside what the post-trade industry itself can change. With 28 different securities laws across the EU, varied tax regimes, and different natures of securities, a large part of the remaining homework lies on a higher level. As an example, one CSD may distribute dividends gross of tax, another one net. Anna Kulik thinks a functional definition of shareholder would be one great advancement.

The yearly Optic conference, in London on 2–3 October 2024, is hosted by the Association for Financial Markets in Europe (AFME). Optic stands for the “Operations, post trade, technology and innovation conference”. PostTrade 360° is there, with our coverage collected here.