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By Jeremy Woolfe

Published: June 5 2011 11:20 | Last updated: June 5 2011 11:20

Copyright The Financial Times Limited 2011. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web.

Jeremy Woolfe asks whether it is causing problems not just for legislators but for all those who are pushing toward comparability in the finance and pensions industries.

A meeting involving different EU nationalities might waste time untangling definitions. Direct translations from one language to another do not overcome the confusion because terms are so different.

Tday’s situation has parallels with the mythical Tower of Babel. Genesis, Chapter 11, holds as an ideal that “the whole earth was of one language, and of one speech”. However, the ideal broke down. This was God’s retribution for hubris, entailed in the construction of the tower “who’s top may reach unto heaven”. The result was “language being confounded… that [people] may not understand one another’s speech.” The comparison with pension terminology is apt.

Chris Verhaegen, secretary general of the European Federation for Retirement Provision (EFRP), suggests that the first step towards a solution should be agreeing a common EU criteria. These should be collated in a table for comparison purposes, in other words, ‘a complete mapping’ of the various systems. In its official response to the European Commission’s green paper on pensions, the EFRP proposes “a matrix on European pension systems”.

The matrix would allow member states “to fit their pension systems into a European template”. Once the systems were mapped, discussion on categorising them as “social security arrangements” or “social protection schemes” could begin. The boundaries between the different layers, or tiers, of retirement income could be clarified at an EU-level based on commonly agreed indicators for each tier.

However, Verhaegen admits that creating the matrix would not be easy. “It would be optimistic to think it could be done in a year,” she comments. She cites first and second pillars as one example of the confused definitions.

Another example is the term pension itself, which in some member states is only defined from a fiscal perspective. Verhaegen says that although the matter has caught the attention of the EU Council progress is slow.

An official at the European Commission confirms that pensions professionals have difficulty in agreeing measurement rules between jurisdictions. Even when so called equivalent standards are supposedly in use, he says few co-ordinate properly.

The route ahead, says the official, must lie with adopting and developing an eXtensible Business Reporting Language (XBRL). XBRL, he continues, “would force harmony across different concepts and definitions used by professional practices in different EU jurisdictions.” He says it is essential that the supervisory organisations, such as the European Systemic Risk Board (ESRB) and the ECB, achieve “archive harmony”.

XBRL is a computer language used to describe financial data. Dating back to 1999, it is managed by a non-profit consortium, XBRL International. XBRL’s technicalities are complex. Its communications systems are defined by sets of metadata, which are established in taxonomies.

Taxonomies include the definition of individual reporting elements and the relationships between different elements. For pensions, the first challenge is to agree common ‘tags’ to match definitions. Tags are computer readable sets of data that go towards the processing of financial statements.

In Europe, the official says, the take-up of XBRL is, so far, most advanced in the banking sector, which has been using the taxonomies since 2005. At least 12 financial authorities are now demanding it, or allowing it. Gilles Maguet, secretary general of XBRL France, notes that banks in half of the EU are using XBRL to apply Basel III rules.

Although Maguet says that adoption by the pension world is “a bit late”, progress in the insurance industry – driven partly by the Solvency II – has been of benefit to pensions accounting.

Upgrades would enable the insurance and pension investment firms to be able to communicate better with authorities such as the Insurance and Occupational Pensions Authority (EIOPA). The authority took over from Committee of European Insurance & Occupational Pensions Supervisors (CEIOPS) on 1 January.

Last year, CEIOPS stated that, for insurance, the taxonomy is still being worked out. A binding solution is scheduled for early 2013.

From IPE Com (news)

Philip Neyt says such a move would defy logic, reports Jeremy Woolfe.

Harsh criticism of forthcoming EU rules that may force European Union pension fund managers to move further from equities into bonds comes from the chairman of the Belgian Association of Pension Institutions. Philip Neyt says the probability confounds logic. “I am very worried. The authorities should be pushing for moves in exactly the opposite direction.”

Mr Neyt blames the intended, but as yet unconfirmed, move by the European Commission to apply Solvency II rules to pension funds as highly damaging both to the interests of future retirees, and to the European economy as a whole. He describes the push as well intentioned, but obsessively based on historic models.

Yes, Mr Neyt admits, equity performance may have been poor during the past 10 or so years. But today’s problem is different. Now we face the threat of a bubble in bonds. “Furthermore, if we lock ourselves into low returns, and then hit higher inflation, we shall be in real trouble,” he says. Herd behaviour could put further pressure on yields, resulting in lower pension income.

However, he continues, who can be sure of what the future holds? Logically, the standard setters should be encouraging the principles of investing by common sense. In practice, this would mean applying pressure away from bonds and into equities. In any case, they should hold back on rules.

The logic behind the position of Mr Neyt, who is also chief executive of the pension fund for Belgacom, the Belgian telecoms group, rests on the fact that pension fund managers are seeking to cover liability obligations perhaps 25 years, or more, from the present. Compared with this, bonds are in fact “short-term instruments”, he says. And, at present, their return is a low 3-4 per cent, not far above inflation, thus risking the value of future assets.

The background to Mr Neyt’s protest is forthcoming EU legislation that could bring occupational pension schemes (known in EU jargon as institutions for occupational retirement provision, or Iorps) under the Solvency II rules in the process of being applied to life insurance companies. The official logic is to create a prudential level playing field between different sectors, including banks and insurance companies, that invest for future pensions.

Solvency II rules set capital requirements based on an institution’s exposure to risky assets, in a similar way to the Basel II rules that apply to banks. More capital is needed to back equity holdings than bond holdings. For each holding in equity of about €100, institutions need a capital buffer of nearly €40, which is unnecessary for government bonds. Funding by employers would have to rise significantly, says Mr Neyt.

Overall, funded pension schemes and life insurance policies amount to more than €10,000bn ($13,200bn) of assets at EU level. This represents half of total long-term household savings. Of the €10,000bn, €3,700bn is invested via occupational pension schemes, says Mr Neyt, and an average 40 per cent is in equities. If the Solvency II rules do get extended to these schemes, €1,200bn of the equity holdings would have to be sold off.

His second line of protest is damage to the European economy resulting from the withdrawal of thousands of billions of euros by pension investors.

If we lock ourselves into low returns and hit higher inflation, we shall be in trouble.

Similar alarm is echoed by MiddleNext, the Paris based association for mid-cap firms in France. Its secretary general, Caroline Weber, says Solvency II is already resulting in reduced equity investments by insurance companies in mid-cap companies. The proportion of assets under management held in the sector by insurance companies is on its way down from 20 per cent to an expected 3 per cent.

The European Commission’s head of unit for insurance and pension financial institutions, Karel Van Hulle, holds the general view that “the issue is not that simple”. He says the legislative situation “is still [in] the realm of speculation”. He suggests pension fund managers should “continue diversifying their portfolio of investments”.

However, Mr Van Hulle concludes with the somewhat barbed question: “Who will protect the members or the policyholders if the pension fund or insurance company has put all or most of its investments in very risky assets?”

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In a recent speech, a senior European Commission official warned accountants that a drastic tightening of auditing rules in the European Union is under consideration in Brussels, including possible segregation-of-service rules on client auditing and accounting services, and requiring auditors to give “an unencumbered opinion of a situation”, as opposed to the current “historical review.”

At a mid-December meeting the European Federation of Accountants, or FEE, in Brussels to discuss a European Commission public consultation process on audit policy, members heard Jonathan Faull, a director general at the commission, refer to “complacency” in the auditing sector, which he described as “out of tune with the present times”.

Faull reports directly to Commissioner Michel Barnier, the head of the department that proposes much of the new financial legislation for the European Union, who launched the current move to scrutinize auditing with a “green paper” on audit policy in the fall of 2010.

Faull went on to elaborate on the present spirit of the Brussels institution: “The crisis may have been global, but it did start in the financial sector, and it is causing misery all over Europe”.

Hence, the commission’s position was that today’s “status quo is not acceptable”.  Faull said that there are still gaps in the regulatory system that need filling, adding, “We hope to have a new set of regulations which we hope will remain in place for a generation.”

Later, during question time, when some of the questioners exhibited a decidedly barbed reaction to Faull’s approach, he noted a link between the financial crisis and auditing lapses in the banking industry.

In his main discourse, Faull fleshed out a series of radical proposals now under consideration by the commission. These included rules governing the independence of the auditor. (In an explanatory paper elsewhere, the commission expands on this theme, noting its investigation into possible “conflicts of interest” when a firm both audits a company’s results and offers it consultancy services to the same firm. In the U.S., the Sarbanes-Oxley Act of 2002 explicitly listed the services that auditors could not offer clients.)

At the Brussels meeting, panelists suggested that the auditors should be appointed by company audit committees, rather than by the main board of directors. However, Faull went further, airing the possibility that the right to appoint an auditor should perhaps be placed with an independent organization. This would remove the right of appointment from the firm subject to audit.

The possibility, described later by one delegate to the meeting as “aggressive”, was defended by Faull as “necessary” in the light of “professional skepticism” from investors. (In its paper, the commission refers similarly to an “expectation gap” between auditors and stakeholders.)

Faull’s comments came as part of the commission’s intention to a review its Statutory Audit Directive of 2006. This legislation was mandated for transposition into the national codes of the EU’s 27 member states by 2008. In fact, some countries delayed adoption until this year.

The current assessment started off with Barnier’s “green” policy paper, issued in the fall of 2010. Among the more radical possibilities raised in the paper were a blanket prohibition on non-audit services, mandatory rotation of auditors, and having a third party assign auditors. An astonishingly high number of comments, estimated at 800, illustrates the heat building up from some stakeholders. A commission digest of the responses is due in February 2011.

This is to be followed by a formal commission position, expected by mid-2011. Its proposals would then be debated, and, no doubt, amended, by the European Parliament, during the rest of the year. Any lobbying could normally be expected during this period. Any revised legislation, which would also require clearance by national governments, could be in force in 2013, or later, depending on resistance.

Some reactions to the policy paper have been made public. One instance is FEE’s own answer to the green paper’s question, “Are audits fit for purpose?” Interestingly, FEE noted that audits are “currently not explicitly providing comfort on companies’ financial health, which seem more future-oriented.”

A comment letter from the U.S.-based Center for Audit Quality also noted a disconnect between what financial statement users think auditors are providing, and how auditors themselves view their role – but warned the commission not to go too far with radical measures to boost auditor independence, and not to revise auditors’ reports to the point where they diverge significantly from those in other parts of the world.

From Source  Media, New York, read mainly in USA.

The European Commission’s internal markets directorate-general is handling a surge of financial legislation in the aftermath of the financial crisis.

So it may not be the best time to be losing two of its most senior officials. But both Jörgen Holmquist, director-general, and David Wright, deputy director-general, will leave for academia before the summer

Mr Holmquist, a Swedish national appointed to his current post in January 2007, is to take up a fellowship at Harvard University, while Mr Wright, a Briton, is heading for Oxford University after 33 years with the Commission.

Jonathan Faull, another Brit, will take over as director general, moving from the Commission’s legal service, where he occupies a parallel position. Mr Faull’s background is predominantly a legal one, in contrast to the two departing officials, who have developed their expertise in financial legislation over years of service.

The mechanics of the staff shuffle are that the European Union governments, meeting behind closed doors, as always, opted for a French Commissioner for the Commission division that deals with financial legislation. They chose Michel Barnier, former EU Commissioner for regional issues.

While he has been described as unlikely to instill fear in the hearts of City of London bankers, the British demanded that one of their nationality take the next highest post. This insistence lead to the forthcoming demise of Mr Holmquist.

Mr Wright, was the obvious successor as director general, and fits the unwritten rule in Commission circles that prevents a concentration of the same nationality in any particular sector.

However, he was ruled out for being, according to the common Brussels view, “too European” for the British government to stomach. Many of the division’s 130 financial legislators view the situation with cynicism.

‘The remarkable’ situation is not the way to run the Commission during time of crisis.

they admire Mr Wright’s expertise. One example of his outspokenness came up recently when he was addressing European bankers.

“In the end, there is going to have to be more capital in the banking sector,” he said.

This is not what the members of the European Banking Federation wanted to hear.

Mr Wright’s departure is described as a shock to many people by Peter Skinner, a British member of the European Parliament, who is active in the insurance sector of financial legislation. Mr Skinner feels the UK is losing someone with significant influence in the EU.

“He understands the broader landscape of EU effort, which is necessary for markets to be competitive on a global basis,” he says.

He also notes Mr Wright’s leadership role, and the pressure he has been applying to maintain liaison between financial regulators in the EU and the US. He hopes Mr Wright’s move “will not be the end to his contribution to the EU”.

Mr Holmquist’s departure has resulted in newspaper complaints of weakness by the Swedish government in its failure to defend the position of their most senior national official in the European

Commission. Gunnar Hökmark, a centre right Swedish MEP, says the “remarkable” situation is not the way to run the Commission during a time of crisis, or any other time.

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Also, the paper will set the scene for a future directive on defined contribution schemes. But its policy would include attention to “proper disclosure of investment policy” as Karel Van Hulle, insurance maestro in the European Commission has confirmed. Van Hulle was speaking at a recent Brussels conference run by the European Federation of Retirement Provision.

Also lurking in the background is Solvency II, which modernises capital reserve requirements for insurance companies. Not due for final implementation into national law until the end of 2012, the directive is currently being fleshed out through level-two implementing measures.
More to the point, Solvency II’s relevance to IORPs is still alive. Although Solvency I rules are referenced in Article 17 of the IORP Directive to retain the status quo, this will be reviewed. Roger Koch, senior EU legal analyst at Aegon – the life insurance, pensions and long-term savings and investment products group – points out that the IORP solvency rules currently apply only where investment or biometric risks are borne by the IORP itself.
What is unclear is how exclusion arrangements from Article 17– where the employer meets any shortfalls – will be dealt with. They currently fall outside any EU solvency regime. If this carve-out is retained, any new EU solvency rules would leave employer-backed schemes such as those in the UK unaffected. Koch says: “EU thinking seems to be ready to accept national diversity for funded pensions, particularly regarding the workplace. It aims to create a solvency regime that caters for this.”
Koch finds EU pensions legislation “complex and fragmented”. He says: “If the EU is going to tackle this, it also needs to understand how its rules, particularly in financial services, can better dovetail with member state social and consumer protection requirements. Pension diversity must be respected, but its interaction with internal market rules must also be more transparent and manageable.”
Comment by the pension industry is exceptionally mute; one organisation said there was no issue, while another gave support to a feeling of nervousness, but was reluctant to react until the green paper is published.
With pensions across the EU provided by a number of sectors – insurance companies, banks, and mutual funds – and with the obvious pressures to secure a level playing field, it is worth looking at Solvency II.
Pension fund managers may not consider themselves to be directly in the firing line. Nonetheless, the recommendation by the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) to tighten up on capital reserves, which are to be specified in level-two procedures of Solvency II for insurance companies, appears likely to have knock-on effects.
An official at the Commission said that when it presents its policy paper later this year, it does not expect to comply with the CEIOPS’ ‘conservative’ recommendation. “What we want is a carefully calculated set of capital requirements. The Commission wants a balanced system,” he said.
Exactly how insurance companies have to organise their capital reserves is described by Jacqueline Lommen, manager of pan-European funds at the Amsterdam office of Hewitt Associates. Pre-Solvency II control of capital reserves, she explains, involves a cap on how much of their reserve capital insurance companies may place in specified risk sectors. Depending on national rules, the upper limit might be 20% in equity, 5% derivatives, and so on.
Under Solvency II’s risk-based system, companies are being excused these caps. However, the rules penalise exposure to risk in different categories of asset (and liability) management. How the Commission’s forthcoming policy paper will shape up is hard to guess. One problem could be the conflict between legislators presumably aiming for a ‘fair-play’ version of the IORPs II, and political officials presumably aiming to smooth over pressures from 27 diverse national governments.

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Compliance with Solvency II will provide IT managers with many challenges, not least the sheer scale of the exercise. There is also greater complexity, with legal rules shifting from spelling out a series of provisions, to being a principles-based system.

Peter Skinner, the British MEP who nursed the package though the European Parliament, says, “Solvency II shifts the focus of supervisory authorities from merely checking compliance with a tick-the-box approach based on a set of rules to more proactively supervising the risk management of individual companies based on a set of principles.”

The directive, which cleared the Brussels legislative machinery in April last year, requires IT architectures to be ready for the directive’s enactment in national legislation by 31 October 2012. Non-compliance could endanger an insurance company’s right to trade.

Timing for setting up the modelling software to meet of the new rules has to follow a set programme, broken down into stages. For instance, according to risk management consultancy Watson Wyatt, the UK Financial Services Authority (FSA) required that as early as March 2009, firms should have stated whether they plan to apply for internal model approval,

By June to November 2010, the start of the first model dry-run period should have started. By October 2011, the FSA should be in receipt of the first batch of dry-run submissions. Second dry runs should take place in 2011 and 2012, with the FSA review/approval process running from 2012.

Jürgen Weiss, principal research analyst at Gartner, reckons that some companies will start the main IT work in three months, but others will not get going for another nine months.

Weiss says most European insurers are still in “a discovery phase”. IT managers are uncertain about budgeting their future Solvency II programmes. Some have not even requested an IT budget to cover work in 2010 on the regulations.

Almost all IT organisations that are familiar with the regulations have focused exclusively on the first of the three pillars of Solvency II. This primarily addresses the quantitative capital requirements for European insurers and the actuarial models with which these requirements are being calculated.

Gartner believes the efforts to comply with Pillar 2 requirements will be significantly higher than the efforts for the other two Solvency pillar investments because of the heterogeneous IT landscape of many insurers and the efforts to at least semi-automate data collection and normalisation. Weiss says this is worrying.

He says several level-two implementation measures on Solvency II, published in November 2009 by the EU’s advisory body for the insurance industry, the Committee of European Insurance and Occupational Pensions (CEIOPS) explicitly address IT issues. Examples are advice on data quality, data governance and documentation.

Weiss says risk managers and actuaries should now be collaborating with their IT colleagues. Business and IT managers should also be aware that Solvency II requires a holistic approach to risk management, encompassing people, processes and applications.

A contrasting view on timing comes from Steve Bell, financial services advisory partner at Ernst & Young: “With regard to timescales, there are a large number of interim dates, and in my experience for most clients they are not running too late as there is time remaining to gear up programmes.

“IT will need to deliver new or enhanced risk management systems. This will be the key IT new system build. The bigger challenge will be to provide accurate data to a lower level of granularity on more regular intervals than before from source systems many of which in insurance are legacy in nature. This is the area that will be harder for insurance IT teams.”

Management consultancy Deloitte and Touche is helping insurance companies to specify their IT needs to enable them to purchase compliance software. It says an official EU guideline, CP 58, gives a steer on the pre-application process, offering “advice on supervisory reporting and disclosure deals with the requirements for insurance companies to report to both the regulators and the public”.

Companies lining up to supply insurance companies with the software they need include: IBM, SAS, SAP, Oracle, Sungard, Fermat, EMB, Algorithmics, Towers Perrin, plus a fragmented array of specialist application providers.

IBM says the revision of its insurance industry framework – which it describes as a blueprint to address all three pillars of Solvency II – is complete and already being used by more than 150 insurers.

Isabella Hess, senior managing consultant at IBM Global Business Services, says IT departments should be thinking about adopting an enterprise-wide information architecture as, for most large groups, the concepts and strategic direction are “more or less ready”.

Hess says there is little real choice as the regulator and analysts are unlikely to look favourably on any big player adopting a more simplistic, standard model-based risk management framework.

One fundamental issue is the quality, availability and traceability of data. For example, the data “granularity” defined by data models is usually hardwired into policy systems and can be difficult and expensive to change. (Granularity is the level of detail of “attributes, “fields, and data types that can be provided).

Similarly, insurers may need to collect more comprehensive information about the quality and risk-sensitivity of their investments portfolios than was required previously, and do so more frequently and faster.

Solvency II software will eventually better reflect an insurance company’s exposure to risk. This will enable a company to plan its business development, liquidity management and risk appetite to get the best payback on its capital reserves. In other words, IT managers will be buying a system that will enable firms to make better use of their capital.

Hess refers warmly to phase two of the International Accounting Standard Board’s forthcoming IFRS 4 on insurance contracts, for which an exposure draft is due in the second quarter of 2010. In planning Solvency II architecture, she advocates the use of other industry standards. These include Acord, the emerging international standard for information exchange, and service-oriented architecture for data exchange.

Hess says large insurance firms could be facing bills for around €100m each as a result of Solvency II. However, many have partially completed work on data and processes, leaving only “heavy lift work in intellectual modelling and embedding their enterprise risk models” to be done.

Hess estimates that second-tier insurers will need to invest between €30m and €40m over three years. Smaller companies could expect to pay €1m to – €1.5m each.

According to the CEA, the European insurance and reinsurance federation, the total number of insurance companies operating in the EU is 5,200. This figure could be increased if one takes in associated economic zones, such as the European Economic Community.

More accurate ideas on cost are likely to come from the publication of the next Quantitative Impact Studies (QIS) on Solvency II, expected in August 2010. The fifth in a series of reports, the study aims to assess the likely impact on insurance markets and products, social and economic impacts and the likely impact on insurers’ balance sheets and business behaviour of the potential policy options being considered by the EC.

Insurance companies are reminded that in 2012 it will not be enough just to say that you have purchased a Solvency II compliance software package. A Brussels mandarin close to the directive emphasises that this will not satisfy the regulators. “In the UK, the FSA will never give blind approval to the software itself, but will check on functionality,” he says.

The European Union could follow the US in adopting the system of trade repositories for registering trades in credit default swaps. This move “could cast light on over-the-counter markets in these derivatives”, says Eddy Wymeersch, head of Cesr, the Paris-based Committee of European Securities Regulators.

“The set of the European version of the repository [data warehouse] and the type of services provided will depend on the market participants,” he adds.

Cesr, which currently has an advisory role, is set to be upgraded under plans announced by the European Commission. It will gain a new name, becoming the European Securities and Markets Authority (Esma), and binding powers as a senior financial regulator.

Mr Wymeersch says a Cesr expert group has been studying the usefulness of trade repositories to strengthen the post-trading infrastructure of OTC derivatives, notably markets in credit default swaps, since late last year. The initiative for the present study follows calls by regulators in the EU for more public information about OTC derivatives. EU finance ministers in December 2008 asked explicitly for the risks to be looked into.

In July, the European Commission adopted a communication that looks at the role played by derivatives in the financial crisis. It seeks steps to reduce risks, and ensure efficient, safe derivatives markets.

Mr Wymeersch says the Cesr investigation, published as a consultation paper last week, aims to tackle the lack of transparency in the CDS market, which has an estimated global notional gross value of about $30,000bn (£18,657bn, €20,541bn).

‘Having information in one place is a crucial contribution to reducing risk’

Donald Donahue Chief executive, DTCC

to be propped up with $180bn of state support. To reduce risks, initiatives have been supported to create central clearing houses.

The central repository will come on top of this, says Mr Wymeersch, functioning as a warehouse for the electronic storage of trades done by dealers and others in OTC derivatives. It will create transparency and reliability, and will allow banks to reconcile their positions. It will also feed supervisors with much needed detailed data about transactions and positions.

This information will help both macro prudential supervision and micro supervision, and perhaps avoid the accumulation of risk that was known in the recent past. It would also provide supervisors mandated to ensure market integrity with reliable data for investigating market abuse cases.

As for a third possible regulatory step, that is, bringing CDS trading onto a regulated market, such as a stock exchange, Mr Wymeersch is cautious. “This is a decision for market participants. If the US will mandate this type of trading, Europe is likely to follow, to avoid regulatory arbitrage,” he says.

In a recent letter from Cesr to the European Commission, Mr Wymeersch justifies the Cesr study on an EU repository by noting the large number of European entities active in derivatives markets. He notes the European origin of many underlying instruments, and the high proportion of contracts denominated in euros.

Options open to the Cesr expert group include doing nothing. But it could also suggest setting up some kind of collaboration with the existing trade repository for CDSs, the Trade Information Warehouse, although sufficient guarantees for the European market operations would have to be secured.

Set up in 2006 by the Depository Trust & Clearing Corporation in the US, the warehouse holds transaction details on CDS contracts traded by market participants in 35 countries. It played an important role in bolstering the teetering financial system last year.

Last October, after Lehman Brothers collapsed, the DTCC informed the market that, based on its warehouse records, the exposure to Lehman’s was a net notional value of about $6bn. This was done to stem speculation that the credit derivative exposure was $400bn. When the Lehman exposure was closed out, the actual value was $5.2bn.

Given the complexity of CDS contracts, “having all of this information residing in a single place is a crucial contribution to reducing risk and promoting market efficiency”, says Donald Donahue, DTCC chairman and chief executive.

Cesr itself takes a neutral stand as to who should be in charge of organising a European trade repository, says Mr Wymeersch. “However, it [Cesr] will lay down rules to ensure safety and efficiency. Such rules will cover open access to any proposal for a repository.”

He adds: “European operators may come forward with proposals.”

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