post-trade

Thomas Murray was founded 24 years ago to assure that investors’ property is respected by custodian banks. This was a time when institutional portfolios were spreading investments across multiple jurisdictions, a trend that has accelerated over this past quarter century. The firm’s remit widened to cover the spectrum of post-trade services, always with the same focus on investors’ safety and rights. Shareholder rights are, in fact, central to the financial system, and so also the key focus of Thomas Murray’s work.

Shareholder rights are a critical economic concern: when the members of the public are asked to hand over hard-earned savings as an investment in a corporation, whether in a stock or a bond or another financial instrument, the managers of that enterprise have an immediate obligation to handle that money fairly and honestly. Without trust in proper conduct by those managers in growing the enterprise such that value is created, we will not have the investment or capital formation (or jobs, or goods and services!) that our societies need.

This is the fourth in a series of five thought pieces Thomas Murray wishes to share with clients this summer, the questions for our fields of expertise before the amorphous Brexit project takes shape.

In response to the 2007-2009 financial markets crises, and in line with G20 direction on restoring global economic growth, a primary objective of the European Commission was to shore up gaps in capital markets regulation wherever they were to be found.   As regards custody, the partially overlapping segments of central securities depositories and custody banks have been subject to colliding regulatory purposes and often contradictory official projects – if confusing, this is somewhat understandable given that the two domains fall between capital market and banking legislation/regulation, each subject area with its own points of view.  This still needs sorting out, and that clarification of duties and compliance will take place in the near background whilst the British exit from the EU is defined and executed.

In response to the 2007-2009 financial markets crises, and in line with G20 direction on restoring global economic growth, a primary policy objective of the European Commission was to extend the existing, rather limited regulation of financial market infrastructures (‘FMIs’).

As defined by global regulators, FMIs fall into four categories. These are central securities depositories (‘CSDs’), central clearing houses (‘CCPs’), trade repositories (‘TRs’), and payment systems. The two important regulations developed by the EU in this space are the European Market Infrastructure Regulation (‘EMIR’) and the Central Securities Depositary Regulation (‘CSDR’). This article will discuss the possible implications of leaving the EU specific to these regulations.

This posting is the second article in a series being run by Thomas Murray Data Services.  It focuses on the context in which the terms of Brexit will be finalised between the UK and the EU as regards post-trade financial services.

In order to understand the possible implications of Brexit on the post-trade area of financial services, it is essential to grasp the current relationship between the UK and the EU in this segment. By understanding the historical context and the policy details, we can more accurately form an opinion of what the implications of leaving the European Union might be.

Thomas Murray wishes to share some preliminary thoughts concerning the United Kingdom’s decision to leave the European Union, as pertains to the financial industry’s post-trade services.  These are the questions we will be asking ourselves as this transformational project takes shape in the coming years.  This piece introduces a series of five articles that will be posted in the days and weeks ahead.  As policies get clarified in the months to come, the firm’s further reflections will become progressively more detailed.

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