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The European Financial Market Lawyers Group was established in 1999 with a view to discussing the possibility of promoting
initiatives which would lead to an enhanced harmonisation of European
financial market activities. The Group meets on a regular basis in plenary
composition between three and four times a year, and ad hoc
sub-groups meet as necessary.
The reasoning behind the establishment of the EFMLG was that, with the
introduction of the euro, a significant step towards the completion of
a single financial services and wholesale banking market in the European
Union was made. The single monetary policy and, through the TARGET system,
a single money market reflected in single market rates (the Euribor and
the Eonia) were established. The introduction of the single currency,
which took place on 1 January 1999, further enhanced the possibility of
cross-border securities transactions, using existing and newly created
links between securities settlement systems and organised markets. However,
the European financial markets are still hampered by the absence of a
single set of legal rules and harmonised contractual practices. National
legal systems divide the euro area and the EU at large. Those entities
participating in European financial markets on a pan-European level still
have to cope with the existence of 15 different legal systems and practices.
Therefore, the EFMLG aims to discuss the possibility of promoting initiatives
which will foster harmonisation of the law and practices of financial
market activity.
The EFMLG analyses topics that have been identified and selected by the
Group as being obstacles to a fully fledged single European financial
market. After analysing a topic, the Group considers whether the issue
merits further attention, e.g. by issuing recommendations for legislative
action at the European Community or national level, or by giving recommendations
to the markets for best practice. Amongst the issues identified and discussed
so far are:
- legal barriers to the cross-border use of collateral (pledges and
transfer of title arrangements);
- the use and effectiveness of master netting agreements;
- the possibility of a pan-European definition of "business day"
and/or "bank holiday" for contractual purposes;
- market documentation (European Master Agreement);
- conflict of law rule applicable to cross-border securities transactions;
- definition of "force majeure" for contractual purposes;
and
- legal regime for the dematerialisation of securities.
When discussing these issues, the EFMLG pays close attention to the activities
of other relevant groupings such as the Financial Market Lawyers Group organised
by the Federal Reserve Bank in New York, the Financial Law Board organised
by the Bank of Japan and the Financial Markets Law Committee organised by
the Bank of England.
Until 2007, Klaus Löber was the secretary to the Group.
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