The Giovannini Reports of 2001 and 2003 described three spheres of difficulties within the post trading sector, relating to: (i) technical requirements and industry practices; (ii) taxation; and (iii) legal certainty. Within these three areas, the Reports identified fifteen specific obstacles to the emergence of a truly single post-trading market in the EU, the so called "Giovannini Barriers".

The Commission mandated an expert group, the Legal Certainty Group, to advise on the dismantling of the barriers having legal issues at their source. This led the European Commission to launch a first consultation in April 2009 in order to provide for a “more harmonised legal framework for intermediated securities and a better protection of investors’ rights enshrined in their securities”.

In November 2010, the European Commission launched a second public consultation to feed into a planned Securities Law Directive (SLD). The Directive is expected to address three issues:

a. 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;
b. the legal framework governing the exercise of investor's rights flowing from securities through a "chain" of intermediaries, in particular in cross-border situations;
c. the submission of any activity of safekeeping and administration of securities under an appropriate supervisory regime.

Further information on the topic is available via this link to the European Commission webpage.


ICMA’s response to the consultation paper can be accessed through the link below:

21 January 2011   
ICMA European Repo Council response to the 2010 European Commission consultation on the Harmonisation of Securities Law