Elimination of Technical Barriers in European Securities Settlement

Posted: 21 May 2008

Abstract

Securities settlement in Europe is still said to be highly inefficient for cross-border transactions. One reason can be seen in the technical barriers of the different settlement systems. This paper provides an overview of communication standards in securities settlement and evaluates different models for the integration of European securities settlement. SWIFT in combination with XML is establishing as standard for post-trade services. The CSD-link model, the hub and spokes model, and the central European CSD are models that go further in the integration of securities settlement. They have in common that they address the problem of interlinkages of national CSDs and differ essentially in the way of achieving the integration. These models and currently discussed approaches are introduced and the current status is presented. The models are systematically compared with each other considering transaction costs, risks, and the integration of the cross-border securities settlement process.

Keywords: Clearing and Settlement

Suggested Citation

Schaper, Torsten, Elimination of Technical Barriers in European Securities Settlement. Available at SSRN: https://ssrn.com/abstract=1134795

Torsten Schaper (Contact Author)

Deutsche Börse Group ( email )

Frankfurt, 60485
Germany

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