The representatives of the Central Security Depositories (CSDs) operating in Greece, Turkey and Israel, convened on February 20-21, 2003 in order to discuss cooperation in the area of clearing and settlement of cross-border trades.

Each delegation presented in brief the operational aspects of its business, thus making it possible for all to understand the potential for cooperation. Following this, the alternatives of cooperation were presented and discussed in detail.

The discussion verified that the member-to-member solution chosen by the exchanges and the members can be put into operation, at the first stage, with the process of clearing and settlement remaining local within each capital market.

The delegations agreed to start cooperation for the creation of an operational link of their clearing and settlement procedures in order to better serve cross-border transactions. They adopted the Eurolinks model, a bilateral link model, created by the European Central Securities Depositories Association, as a basis for the development of the link. The Eurolinks model is widely used by European CSDs and has been approved by the European Central Bank as a secure and effective means of managing collateral in a cross-border environment. Currently, there exist more than 70 links in the European area based on this model, while more and more non-European CSDs, like those of USA, Japan, Switzerland and Singapore have used it for their own links to and beyond Europe.

In order to demonstrate their willingness to proceed with this cooperation, the 3 CSDs will proceed to sign a Memorandum of Understanding within the following months. The MoU will identify the framework of cooperation and the operational principles that will guide the implementation of the link.

Further, the discussion identified a number of issues of operational, technical and legal nature that need further examination. For this purpose, they have agreed to form common working groups that will propose solutions to the issues identified.

Their target is to put the links into operation by the middle of the year 2004 with the objective that these links will:

• provide a single point of entry for foreign investors in each market through the respective CSDs

• facilitate cross-border settlement regardless of the model of cooperation chosen by the exchanges

• facilitate the payment arrangements

• increase the efficiency in the cross-border execution of corporate actions.

In the long run, these links will facilitate the increase of cross-border transactions among the capital markets of the region.