On 30 September 2015, the European Commission launched its CMU Action Plan, which is intended to help build a true single market for capital across the 28 EU Member States.
The CMU and the European Post-Trade Forum’s (EPTF) work aims to support more efficient and resilient post-trading systems and collateral markets, and includes reviewing progress in removing Giovannini barriers to cross-border clearing and settlement.
In case of cross-border transactions, clarity and predictability about which country's law applies to determine who owns the underlying assets of a transaction is of the essence. If there is legal uncertainty over who owns the asset, depending on which country's courts or authorities assess a dispute concerning the ownership of a security, the cross-border transaction might confer the expected legal title on the parties or not.
For the CDB CSDs, the rules included in the EU Settlement Finality Directive and the EU Financial Collateral Directive include conflict of law provisions which adequately address questions about applicable law for the market participants.