While some might have preferred the stronger legislative clout of a directive rather than a voluntary code drawn up by the European Commission, many believe The Code of Conduct for Clearing and Settlement, signed by stock exchanges, central securities depositories (CSDs) and central counterparties (CCPs) in November 2006, has provided a solution in a much shorter timeframe and that an industry-led solution is more practical.
Once implemented in January 2008, the code is expected to eventually cut the cost of trading shares between exchanges in the 25 member states by enhancing price transparency and increasing competition in the post-trading sector. However, breaking down completely the domestic infrastructures that currently exist in Europe and eliminating the barriers identified by the Giovannini report will take time.
