Standards and Competition in Post-trade Securities Processing

Standards — agreed common arrangements governing both communication of messages and business processes — play a central role in the post-trade industry. This paper examines these standards, arguing that they need to be understood not simply as technical mechanisms to lower processing costs and improve cross-border interoperability, but as central determinants of competition. This can lead to inefficiency, as incumbents are likely to resist the adoption of harmonized standards when this threatens their competitive position.<p>The prospects for efficient harmonization of standards in the post-trade industry are not however entirely bleak. Current policy measures being pursued to promote greater pan-European competition are focusing attention on those standards that are most critical for promoting greater competition in post-trade processing