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Common Balkan stock exchange platform to attract investor interest

22 December 2010 / 11:12:32  GRReporter
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The time is suitable now for a fundamental common platform to unite the Balkan markets. The economic situation and the difficulties the countries in the region are going through inevitably affect the number of shares traded on stock exchanges. A common platform between Athens, Sofia, and Bucharest could attract the interest of international investors and increase turnover. This is the opinion of the new president of the Athens Stock Exchange Sokratis Lazaridis who asked by GRReporter "Do you think a common Balkan trading platform is possible to be founded," answered:

"I will visit Sofia in late January and I will be able to personally discuss the opportunities for a more expanded cooperation with my Bulgarian colleagues," said Lazaridis at the official Christmas lunch with journalists in the building of the Athens Stock Exchange. He believes the stock exchange will play a key role in the new privatization program of the government. Privatization of public enterprises in 2011 will strengthen the movement in the stock market and will provide new investment opportunities. Lazaridis became the president of the Athens Stock Exchange a month ago, after the six-year term of his predecessor expired. He held a series of meetings with foreign investors in the first month of his new assignment. The financial expert said that international companies show considerable investment interest despite the difficult economic situation in Greece.

Sokratis Lazaridis briefly presented the new regulatory framework for the activities of stock exchanges imposed by the European Union. The main objective of the new rules is to tighten the control over the activities of financial markets and OTC transactions. The expert presented at first the Market in Financial Instruments Directive (MiFID), which acts in a total of 30 European countries and provides improved competition and greater security of investment services consumers. After three years of implementation, it will undergo improvements in 2011 as structural problems and lack of transparency in the transactions have been found.

European Market Infrastructure Regulation (EMIR) is a new type of regulation that sets out the actions to carry out financial transactions outside the financial markets and affects trade in financial products as stocks, bonds and other derivatives. Each country will adopt rules under this regulation separately as the main emphasis is that all OTC transactions will necessarily pass through clearing houses. A more stringent regime for the clearing houses licensing will be introduced, when they are private institutions, and there will be a uniform policy in all countries for the entry of OTC derivatives contracts in the trade repositories.
 
Securities Law Directive (SLD) is a directive that in practice aims to protect the rights of investors on the basis of origin, irregardless of where in Europe they trade. "In fact, foreign investors from Europe are allowed to determine for themselves under which laws to carry out the transactions. For example, Germans will comply with German law (but on the Athens Stock Exchange – author’s note)," explained Sokratis Lazaridis. He described the directive as confusing, because instead of helping the harmonization of legislation in different countries related to the operation of financial markets it will create further difficulties in trade. "The difficulties arising from this directive will be like the Tower of Babel."

Central Securities Depositories Regulation (CSDR) will give a new, more modern operating system and authorization of central depositories as to standardize the work of these institutions on European level. The directive seeks to remove barriers to investors wishing to trade abroad.

Short Selling Directive (SSD) is a directive which is necessitated after the last economic crisis. Sokratis Lazaridis explained that its purpose is to prevent uncovered open sales and added that the changes the new Directive will introduce are already implemented by the Greek Stock Exchange management. It includes control of CDS securities by introducing a set of common functional and performance monitoring requirements on EU level and regardless of location.

Target 2 Securities (T2S) reflects the aspiration of the European Central Bank to establish a common system for securities settlement in Europe to facilitate cross-border transactions as well as those with cash payments in euros - TARGET2. T2S services will be available at central depositories.

 

Tags: EconomyMarketsAthens Stock Exchange
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