EC Launches Consultation on New Legal Framework for Intermediated Securities

The European Commission (EC) has launched a consultation on the harmonisation of the legal framework for securities holding and transactions. Following a request by the Economic and Financial Affairs (ECOFIN) Council, the Commission intends to develop a legislative proposal to increase legal certainty and efficiency of securities holding and improve protection of investors’ rights towards the end of 2009. The consultation is an opportunity for all interested parties to comment on the proposal. The closing date for replies is 11 June 2009.

The Commission Services are currently preparing a legislative proposal addressing the relevant aspects relating to the legal certainty and efficiency of securities holding and transactions. The proposal will address four issues: the legal framework of holding and disposition of securities held in securities accounts, covering aspects belonging to the sphere of substantive law, as well as conflict-of-laws; the legal framework governing the exercise of investors’ rights flowing from securities through a ‘chain’ of intermediaries, in particular in cross-border situations; the establishment of the free, EU-wide choice of issuers regarding the initial entry of their securities in the relevant holding structures, in particular central securities depositories; and the submission of any activity of safekeeping and administration of securities under an appropriate supervisory regime.


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