The EU has taken another step forward in its financial services reform agenda and launched a consultation on the harmonisation of the legal framework surrounding securities transactions and share holding functions.

European finance and economy ministers (ECOFIN) have asked the European Commission to put forward legislative proposals to increase legal certainty and efficiency of securities holdings and improve protection of shareholders' rights. The ECOFIN Council sees these reforms as a key issue and have asked for the Commission to treat the proposals for EU legislation as a matter of urgency.

The consultation is looking for input on four broad issues:

1. Purchases and sales of securities held in securities accounts;
2. Exercise of investors' rights through a "chain" of intermediaries, in particular in cross-border situations;
3. EU-wide free choice of  central securities depositories for issuers; and
4. Securities safe-keeping and administration supervisory regime.

The Commission intends to propose a legislative measure covering these aspects towards the end of 2009. Before making its proposals, the Commission is looking for stakeholder input on the basis of a detailed consultation document. The closing date for replies is 11 June 2009. The consultation is available at: http://ec.europa.eu/internal_market/financial-markets/securities-law/index_en.htm