A focus on settlement discipline regime.
CSDR – what, why, when and who
Central Securities Depositories Regulation (CSDR) is European regulation No 909/2014 and aims to improve securities settlement in the European Union (EU) and within its central securities depositories (CSDs). It applies to all CSDs domiciled in the EU, along with those of Iceland, Liechtenstein and Norway (as incorporated in the European Economic Treaty). Switzerland is subject to certain CSDR provisions via a bilateral agreement. It is expected to apply in the UK throughout any Brexit transitionary period.
CSDR is one of several cumulative regulations and actions taken by the European authorities to improve post-trade harmonisation, safety and efficiency, and to enhance the legal and operational conditions for cross-border settlement. It includes actions to reduce and harmonise settlement cycles and to ensure dematerialisation after 2025.
Its main provisions are:
- Creating a regulatory and prudential regime for CSDs
- Increasing the robustness and resilience of securities settlement arrangements
- Creating a single market for CSD services
CSDR has many implications for our clients. These can be broadly categorised as resulting from extended CSD requirements, internalised settlement reporting and the settlement discipline regime.
In our first edition of the CSDR handbook, we provided a brief update of the extended CSD requirements and internalised settlement reporting. We also have created toolkits that provide guidelines on the new settlement instructions. For more details, please visit our CSDR webpage.
Settlement discipline regime (SDR) affects all market participants
With the implementation of the SDR fast approaching, we are publishing the second edition of our CSDR handbook to share our insight on SDR and its implications for our clients.
SDR harmonises aspects of the settlement cycle and introduces new rules for cash penalties and buy-ins. Trading parties, central counterparties (CCPs) and trading venues will also be impacted and will have to directly comply with all measures relating to cash penalties for settlement failures and mandatory buy-ins.
We hope you find this handbook insightful. To join the discussion or seek additional guidance on CSDR and its impacts, please contact your relationship manager.