CSDR and the settlement discipline regime
We have created a series of handbooks and toolkits to provide guidelines on settlement instructions.
CSDR aims to improve securities settlement in the European Union.
The Central Securities Depositories Regulation (CSDR) applies to European Central Securities Depositories (CSDs), their participants and to securities settlement systems in the European Union (EU).
The objective of CSDR is to introduce a European regime governing various issues related to Central Securities Depositories (CSDs), including:
CSDR was published in the Official Journal in August 2014. In March 2017, the European Commission published Regulatory Standards on:
The authorisation of CSDs in Q1-Q2 2018 was a major step in the effective implementation of CSDR.
CSDR contains rules on dematerialisation of securities and on securities settlement systems. The Central Securities Depositories Regulation applies to:
The CSDR requirements provide detailed legislative provisions on:
In March 2022, the European Commission proposed a review (“Refit”) of CSDR covering passporting rules, supervisory convergence, a review of the rules governing bank-type ancillary services and a revised approach to settlement discipline with the introduction of a 2-step approach to mandatory buy-ins (“MBIs”). The Refit proposal is still under discussion and is expected to be finalised in 2023.
CSDR and its Refit changes can have far-reaching consequences, namely:
We believe that CSDR is an important step forward to build safer and more integrated post-trade infrastructures as well as increase efficiency of securities settlement. CSDR is a crucial element of T2S’ success.
While we support the newly defined settlement discipline framework for penalties as it aims to reduce settlement fails without jeopardising market liquidity, we believe settlement discipline rules require strong adaptation from all market participants. We actively participate in ensuring effective implementation of this framework and its review under CSDR Refit and engage closely with clients to support them.
August 2014 – Publication of CSDR in the Official Journal
17 September 2014 – CSDR entered into force
March 2017 – Publication of level 2 measures (excluding settlement discipline) in the Official Journal
September 2017 – Deadline for CSDs to apply for re-authorisation
May 2018 – Publication of the European Commission’s delegated acts on settlement discipline
March 2019 – Entry into force of level 2 legislation on the calculation of cash penalties and internalised settlement
September 2019 – Start of the revision process of level 1 legislation
December 2020 – European Commission’s consultation on CSDR review
June 2021 – European Commission’s report on CSDR published
November 2021 – CSDR Refit calendar update with mandatory-buy ins (MBIs) deferral agreement (decoupling of penalties and MBIs)
1 February 2022 – Entry into force of settlement discipline rules without mandatory buy-ins
March 2022 – CSDR Refit initiative published by the European Commission
2023 – Expected timing for the publication of the CSDR Refit proposal in the official Journal
We have created a series of handbooks and toolkits to provide guidelines on settlement instructions.
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