EC May Legislate To Cut Cross Border Trading Costs

by Ulrika Lomas, for LawAndTax-News, Brussels

15 September 2005

Speaking in Luxembourg on Tuesday before members of the Association of Lux Fund Industry and the National Investment Company Service Association, Internal Market Commissioner, Charlie McCreevy revealed that the EC may consider legislating to cut the price of cross-border trading.

He told those attending the 14th Annual Europe-USA Investment Funds Forum that:

"I am stating the obvious but it bears repeating: what we need is a more liquid pan-European market with lower costs for all. Cross-border trading remains expensive, sometimes prohibitively so. Cross-border clearing and settlement costs can still be up to 6 times more than those of domestic settlements."

"People debate the multiples. No-one defends the current levels of cross-border costs. We are talking about big money: certainly much more than the amounts which Heads of State and Government are wrangling over in the EU budget negotiations, especially when one calculates the impact of these potential cost reductions on the economy."

The Internal Market Commissioner went on to add that:

"The Commission is taking a close look at the economic case for action. We will decide whether any European legislation, or other intervention, is necessary on that basis and in the light of developments in the market. The next 6 months are crucial. As far as I am concerned, the clock is ticking."

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