Regulating Clearing and Settlement: A Comparative Take

ABSTRACT:

What happens after a trade in securities or derivatives is executed? What makes it possible for the transaction to be finalized? Financial markets rely on the smooth operations of post-trading clearing and settlement infrastructures to support the functioning of the markets and to foster efficiency and promote stability in the financial system.

This Chapter explains the role that clearing and settlement infrastructures play in securities and derivatives markets; analyses the regulatory framework in the US and in the EU, with a particular focus on the international initiatives to support cross-border coordination and market linkages; and ultimately raises a few issues for discussion about challenges that post-trading markets currently face.