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Associations pen open letter on fragmentation of cash equities clearing
09 July 2026 Europe
Image: ShahinAlam/stock.adobe.com
A number of associations have released an open letter to policymakers addressing fragmentation within the cash equities clearing market, which “is imposing unnecessary costs on investors and presents a barrier to a deeper, more integrated capital market”.
The letter is backed by the European Banking Federation, the Association for Financial Markets in Europe, Cboe, the European Fund and Asset Management Association, and the European Principle Traders Association.
As participants in European capital markets, the entities urge policymakers to enshrine mandatory interoperability between central counterparties (CCPs) as a core pillar of the Market Integration and Supervision Package (MISP).
MISP is a legislative initiative designed by the European Commission to remove cross-border barriers, reduce regulatory fragmentation, and create a deeply integrated single market for financial services across the European Union.
According to the letter, the Commission’s proposal to strengthen open access provisions is a step in the right direction, but the group believes greater ambition is warranted, including through the introduction of mandatory interoperability among, at a minimum, significant CCPs for cash equities, which would further enhance competition and user choice.
While open access arrangements exist, the associations, and Cboe, say meaningful interoperability across EU cash equity markets remains only partially realised.
This is largely a result of preferred clearing arrangements that do not offer true choice in clearing, the letter reads.
Consequently, firms are required to maintain multiple CCP relationships and fragmented clearing arrangements, “limiting opportunities to consolidate positions, optimise collateral, and achieve netting efficiencies”.
They say that this creates additional operational complexity and cost that is “ultimately borne by end investors”, including pension funds and retail investors.
Effective interoperability facilitates cross-border equity trading, reduces settlement costs, and supports deeper and more liquid markets, they add. These gains will benefit long-term savers, pension funds, and strengthen the EU’s competitiveness.
The letter presents five key points that they urge policymakers to address.
•Mandate interoperability: Mandate CCPs to interoperate with one or more CCPs when providing clearing services to the same trading venue.
•Align with Articles 35 and 36 of MiFIR: Establish interoperability as the default outcome and explicitly require trading venues to make necessary system changes to support it.
•Review Article 51 of EMIR: Ensure the framework does not unduly restrict new interoperability arrangements and applies irrespective of when arrangements were originally established.
•Provide for consistent supervisory oversight: Where necessary, subject
mandatory interoperability arrangements to European Securities and Markets Authority-level supervision to ensure consistent standards and implementation across the Union.
•Deliver the benefits of open access: Mandatory interoperability should ensure that the objectives underpinning Article 35 and 36 of the Markets in Financial Instruments Regulation are realised in practice by enabling market participants to consistently clear through their CCP of choice, fostering competition and innovation in clearing services while allowing firms to realise collateral optimisation and netting efficiencies.
Concluding the letter, they say: “We stand ready to engage in further dialogue and to provide technical input as the co-legislative process advances. We thank you for your consideration and urge you to seize this opportunity to deliver a genuinely integrated EU capital market.”
The letter is backed by the European Banking Federation, the Association for Financial Markets in Europe, Cboe, the European Fund and Asset Management Association, and the European Principle Traders Association.
As participants in European capital markets, the entities urge policymakers to enshrine mandatory interoperability between central counterparties (CCPs) as a core pillar of the Market Integration and Supervision Package (MISP).
MISP is a legislative initiative designed by the European Commission to remove cross-border barriers, reduce regulatory fragmentation, and create a deeply integrated single market for financial services across the European Union.
According to the letter, the Commission’s proposal to strengthen open access provisions is a step in the right direction, but the group believes greater ambition is warranted, including through the introduction of mandatory interoperability among, at a minimum, significant CCPs for cash equities, which would further enhance competition and user choice.
While open access arrangements exist, the associations, and Cboe, say meaningful interoperability across EU cash equity markets remains only partially realised.
This is largely a result of preferred clearing arrangements that do not offer true choice in clearing, the letter reads.
Consequently, firms are required to maintain multiple CCP relationships and fragmented clearing arrangements, “limiting opportunities to consolidate positions, optimise collateral, and achieve netting efficiencies”.
They say that this creates additional operational complexity and cost that is “ultimately borne by end investors”, including pension funds and retail investors.
Effective interoperability facilitates cross-border equity trading, reduces settlement costs, and supports deeper and more liquid markets, they add. These gains will benefit long-term savers, pension funds, and strengthen the EU’s competitiveness.
The letter presents five key points that they urge policymakers to address.
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mandatory interoperability arrangements to European Securities and Markets Authority-level supervision to ensure consistent standards and implementation across the Union.
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Concluding the letter, they say: “We stand ready to engage in further dialogue and to provide technical input as the co-legislative process advances. We thank you for your consideration and urge you to seize this opportunity to deliver a genuinely integrated EU capital market.”
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