Trade associations are criticising plans by the European Securities and Markets Authority to increase penalty rates to address failures in the settlement of securities transactions (or settlement fails) by an exponential rate, saying that such a proposal could disrupt the securities market.
In a briefing note published on Monday, the International Capital Market Association strongly criticised the proposal. The plan, which would see penalty rates jump by several hundreds of basis points annually, was described as disproportionate and a potential threat to the EU’s position as a financial hub.
