The European Code of Conduct for Clearing and settlement (Code of Conduct) represents a significant achievement of the self-regulation activity undertaken by the exchanges and post-trade industry and, therefore, can be considered as a step of the market participants towards enhanced transparency and the development of an integrated European financial market.
The Code is intended to deliver benefits to the market customers while at the same time improving the safety and efficiency of clearing and settlement of cash equities, especially for cross-border transactions.
Latvian Central Depository, as a member of European Central Securities Depositories Association (ECSDA) participated in the development of the Code and was among the exchanges, clearinghouses and central securities depositories that signed the Code of Conduct.
The Code of Conduct covers:
- price transparency;
- access and interoperability;
- service unbundling and accounting separation
European Code of Conduct for Clearing and Settlement
Price transparency
The objective of Price Transparency is to enable customers to better understand the services they will be provided with and the prices they will have to pay for these services and to facilitate the comparison of prices and services on an individual basis.
Access & Interoperability
The aim of implementation of Access and Interoperability is to offer market participants the freedom to choose their preferred provider of cash equity services at each layer of the transaction chain (trading, clearing and settlement).
The Code is aimed at the improvement of open and transparent access to post-trading services in order to achieve interoperability between different market participants.
Service Unbundling & Accounting
In view of the implementation of "Service Unbundling” of the Code of Conduct, all ECSDA members (being signatories of the Code) have agreed on a common understanding of the services which have to be unbundled according to the Code of Conduct. This understanding is reflected in a common ECSDA Glossary. The tariff brochure that is public on January 1, 2008 reflects our Organization’s implementation of the Code's service unbundling commitments. In addition, and with effect from 1 January 2008, Latvian Central Depository is in a position to be able to comply with the Accounting Segregation provisions of the Code of Conduct.
In accordance with Article 44 of the European Code of Conduct for Clearing and Settlement Ernst&Young has issued independent assurance report on self-assessment report of Latvian Central depository on the principles of Service unbundling & Accounting separation in the Code of Conduct for the year ended December 31, 2008.
In accordance with Paragraph 2 of the Terms of Reference to the Code, LCD has provided the local regulators with a copy of the report.
In accordance with Article 35 of the Terms of Reference to the Code of Conduct LCD has issued the public statement on compliance with the stipulations of the Code of Conduct on service unbundling and accounting seperation:
Independent auditor's report on LCD's Compliance statement
Compliance statement and auditor's report for the year ended December 31, 2010
Compliance statement and auditor's report for the year ended December 31, 2011
