FRANKFURT Dec 3 The European Central Bank said
it may raise its fees for users of the currency bloc's planned
settlement system for stocks and bond trades owing to weak
trading on financial markets during the euro zone debt crisis.
The new Target2Securities (T2S) platform is due to go live
in 2015 and aimed initially to cut trading costs for investors
to about 15 euro cents per transaction. But weak trading volumes
might force the ECB to demand higher fees.
Settling trades, the final step in any deal where ownership
of a bond or share is transferred to the buyer, relies on a
multi-trillion euro system to swap legal title to a security in
return for payment.
Jean-Michel Godeffroy, chairman of the ECB's T2S Board said
in a statement that volumes reported by the 23 settlement houses
that signed up to platform were around 18 percent lower than
expected in 2010 due to the crisis.
"This gives the T2S board cause for concern, as one of the
underlying assumptions of the T2S pricing policy was that EU
volumes would be no more than 10 percent lower than the
projected volumes," Godeffroy said.
He added that the board will look at ways to avoid
increasing fees for its users.
Trading activity in shares has also been hit by the dearth
of new companies coming to the market and lower levels of merger
and acquisition activity than in the run up to the financial
Godeffroy told a conference last month that one option was
to include other assets, such as international bonds, to achieve
the economies of scale initially planned.
"What we want to do is to find new markets. Bringing in
international bonds settled in central bank money could help to
fill the gap," Godeffroy told a panel discussion at the Euro
Finance Week conference in November.
The first settlement houses to migrate to the new system
will be the Bank of Greece securities settlement System, Italy's
Monte Titoli, Malta Stock Exchange, Romania's Depozitarul
Central and Switzerland's SIX-SIS.
Belgium's securities settlement system NBB-SSS, Euroclear
ESES, Spain's Iberclear, Portugal's Interbolsa and Slovakia's
CDCP will join from July 2016.
From November 2016, Clearstream Banking, Austrian
OeKB, Euroclear FIN, LuxCSD, Danish VP Securities and its
subsidiary VPLux, Estonia's AS Eesti Väärtpaberikeskus, CSD of
Lithuania, KDD Slovenia and Keler Hungary will join.
That way, the central securities depositories (CSD)
of the Clearstream and Euroclear groups - which account for
around two thirds of T2S volumes - will not migrate at same
time, reducing the risk of disruption.