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Competition in Post-Trading - An Investigative Essay

Wildgen, Patrick (2008)
Department of Law
Abstract
The 90's shook up seriously the securities industry and pointed the way for the creation of an integrated European securities market. The Institutions have nevertheless been very slow in reacting to the unleashed forces and it was only at the end of the decade with the effective introduction of the Euro that Giovannini Group gave first warnings. The European market was characterised by a juxtaposition of several national markets delimited by 15 barriers of different nature. Moreover, the group identified the post-trading sector as one of the major problem areas preventing more integration. Clearing and Settlement are essential for effective trading by allowing swift and secure completion of the trades. Despite the clashing competition... (More)
The 90's shook up seriously the securities industry and pointed the way for the creation of an integrated European securities market. The Institutions have nevertheless been very slow in reacting to the unleashed forces and it was only at the end of the decade with the effective introduction of the Euro that Giovannini Group gave first warnings. The European market was characterised by a juxtaposition of several national markets delimited by 15 barriers of different nature. Moreover, the group identified the post-trading sector as one of the major problem areas preventing more integration. Clearing and Settlement are essential for effective trading by allowing swift and secure completion of the trades. Despite the clashing competition deficits, the activity of the Commission has been very limited in the field. It led to a single Commission decision in the Post-trading sector, the Clearstream case, and one formal merger approval. In 2006 DG Competition presented an informal Issues Paper summarizing the different competition problems in the post-trading industry and asking market actors for reaction and advice. The present paper investigates this very new field of competition in securities markets, with focus on post-trading infrastructures, scrutinised by EC Competition authorities. It starts with giving the background for latest developments in the securities market from an historical and economic point of view. It continues with a presentation of the actions that have been taken by the Commission, regarding the abuse of dominant position with the Clearstream-case and the general analysis within the Issues Paper. The latter is tested against the replies that the Commission has received by market actors. In the end, a short part deals with the merger review and the Commission's passivity towards the current consolidation in the securities sector, before a short conclusion opens up to future developments. (Less)
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author
Wildgen, Patrick
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
European Business Law
language
English
id
1555240
date added to LUP
2010-03-08 15:23:07
date last changed
2010-03-08 15:23:07
@misc{1555240,
  abstract     = {The 90's shook up seriously the securities industry and pointed the way for the creation of an integrated European securities market. The Institutions have nevertheless been very slow in reacting to the unleashed forces and it was only at the end of the decade with the effective introduction of the Euro that Giovannini Group gave first warnings. The European market was characterised by a juxtaposition of several national markets delimited by 15 barriers of different nature. Moreover, the group identified the post-trading sector as one of the major problem areas preventing more integration. Clearing and Settlement are essential for effective trading by allowing swift and secure completion of the trades. Despite the clashing competition deficits, the activity of the Commission has been very limited in the field. It led to a single Commission decision in the Post-trading sector, the Clearstream case, and one formal merger approval. In 2006 DG Competition presented an informal Issues Paper summarizing the different competition problems in the post-trading industry and asking market actors for reaction and advice. The present paper investigates this very new field of competition in securities markets, with focus on post-trading infrastructures, scrutinised by EC Competition authorities. It starts with giving the background for latest developments in the securities market from an historical and economic point of view. It continues with a presentation of the actions that have been taken by the Commission, regarding the abuse of dominant position with the Clearstream-case and the general analysis within the Issues Paper. The latter is tested against the replies that the Commission has received by market actors. In the end, a short part deals with the merger review and the Commission's passivity towards the current consolidation in the securities sector, before a short conclusion opens up to future developments.},
  author       = {Wildgen, Patrick},
  keyword      = {European Business Law},
  language     = {eng},
  note         = {Student Paper},
  title        = {Competition in Post-Trading - An Investigative Essay},
  year         = {2008},
}