The cost gap is particularly large in cross border settlement .

insufficient development of procedures for cross border settlement on a DVP basis

The cross border settlement for bonds is largely concentrated within two international central securities depositories , whereas the cross border settlement of equities still relies heavily on national central securities depositories .

What specific impact could these issues have on clearing and settlement of cross border transactions ?

Promoting efficient and competitive clearing and settlement of cross border trades impediments to the finalisation of cross border securities transactions are coming into sharper focus .

ANNEX 2 Lump sum allowance a fixed amount which an institution deducts in the calculation of its reserve requirement within the minimum reserve framework of the Eurosystem . Main refinancing operation a regular open market operation executed by the Eurosystem in the form of a reverse transaction .

They normally end on the day preceding the similar settlement day in the following month .

Maintenance period the period over which compliance with reserve requirements is calculated . The ECB publishes a calendar of the reserve main tenance periods at least three months before the start of each year .

Under special circumstances , the published calendar may be amended , depending , among other things , on changes in the schedule of Governing Council meetings .

Main refinancing operations are conducted through weekly standard tenders and normally have a maturity of one week . Maintenance period the period over which compliance with reserve requirements is calculated .

Loss sharing rule ( or loss sharing agreement ) an agreement between participants in a transfer system or a clearing house arrangement regarding the allocation of any loss arising when one or more participants fail to fulfil their obligations

In abnormal circumstances it is of utmost importance that systemically important payments , i.e. those that could cause a systemic risk if not processed immediately , be carried out without delay .

There is now a growing understanding of the myriad legal , tax and regulatory obstacles which stand in the way of efficient clearing and settlement of cross border trades .

They have voiced their preference for the concept of a PE ACH as the future infrastructure for settling cross border retail payments .

Funds transfer system ( FTS ) a formal arrangement , based on private contract or statute law , with multiple membership , common rules and standardised arrangements , for the transmission and settlement of money obligations arising between the members .

2.6 Risks and weaknesses What are the most relevant factors to risks and weaknesses in terms of clearing and settlement of domestic and cross border transactions ( i.e. legal , settlement , custody and operational risks ) ?

ELIGIBLE LINKS BETWEEN NATIONAL SECURITIES SETTLEMENT SYSTEMS Cross border collateral can also be mobilised by using links between national SSSs .

The still fragmented infrastructure for the crossborder clearing and settlement of securities transactions represents a major obstacle to cross border trading and the provision of related asset management services .

CSD Counterparty A Transfer instructions

Not applicable Euro Not applicable

Cross border use 1 Yes

promoted the efficiency of cross border payment and securities settlement transactions in order to support the integration of the euro money market , in particular by developing the technical infrastructure for processing large value , cross border payments in euro ( the TARGET system )

Likewise , TARGET continued to fulfil its other two core objectives , namely to increase

Cross border transactions sent .

2007O0009 EN 01.07.2010 002.001 284 B Cross border transactions received .

Cross border transactions sent .

Cross border transactions received .

For asset backed securities the acquisition of the underlying assets must be governed by the law of an EU Member State .

Eligible assets may be used on a cross border basis , by means of the correspondent central banking model ( CCBM ) or through eligible links between EU securities settlement systems ( SSS ) , to collateralise all types of Eurosystem credit .

ELIGIBLE LINKS BETWEEN SECURITIES SETTLEMENT SYSTEMS SSSs can be linked by means of contractual and operational arrangements to allow the crossborder transfer of eligible securities between systems .

These ESCBCESR standards aim at increasing the safety , soundness and efficiency of securities clearing and settlement systems in the European Union and also take into account the need to remove the barriers to efficient cross border clearing and settlement processes within this area .

These ESCBCESR standards aim at increasing the safety , soundness and efficiency of securities clearing and settlement systems in the European Union and also take into account the need to remove the barriers to efficient cross border clearing and settlement processes within this area . CPSS Publications No 43 , Core Principles for Systemically Important Payment Systems , published by the BIS in January 2001 .

Links between securities settlement systems In addition to the CCBM , eligible links between EU SSSs can be used for the cross border transfer of securities .

The ECB manages its own funds , oversees cross border large value payment and clearing systems and acts as a settlement agent for some of them .

Cross border payments in euro

Cross border use of collateral

Cross border use 1 ) Yes .

Mandatory for crossborder mergers

Memo item Cross border use

and iii ) cross border transactions .

for settlement .

and settl .

for 3 ) settlement .

When looking in particular at cross border transactions , how does the existence of different jurisdictions and the involvement of several actors such as local agents , global custodians , foreign CSDs or ICSDs in 3 the process of cross border clearing and settlement affect the nature and magnitude of these risks ?

The ECB also monitors the work of the Clearing and Settlement Fiscal Compliance Expert Group , which provides advice to the Commission on possible ways of overcoming the tax related barriers to cross border clearing and settlement in the EU .