Integration of European securities markets

It is generally recognised that integration of European securities markets is economically beneficial to the Member States of the European Union and the European Economic Area. It promotes competition between securities service providers, enhances efficiency of financial systems and contributes to efficient allocation of resources. Integration can enable businesses to procure cheaper finance through securities market financing as an alternative to bankbased financing. Lower financing costs support growth and employment within the EU and the EEA. Securities markets constitute an integral part of the single market and the EEA. EC regulation of securities markets, which is primarily based on the objective of market integration, represents an important part of the single market regulation and significantly supports its objectives and functioning. These rules have been incorporated into the EEA Agreement. This paper discusses the development of EC securities market regulation with regard to its impact on the single market. Assessment will be made of the current scope and level of integration brought about by that regulation. The need for further integration will be considered, with reflections on the role of regulatory measures in delivering it.