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European Commission publishes proposal for CSDR review
17 March 2022 EU
Reporter: Carmella Haswell

Image: BillionPhotos.com/stock.adobe.com
The European Commission (EC) has published a proposal for the review of the Central Securities Depositories Regulation (CSDR).

As part of the Capital Markets Union Action Plan — a project launched to establish a true single market for capital across EU member states — the review aims to make securities settlements in the EU safer and more efficient.

Additionally, the proposal aims to facilitate CSDs’ ability to offer cross-border services and improve their cross-border supervision.

In the review, amendments are required under the settlement discipline regime of CSDR, which states that settlement fails are not subject to the penalty mechanism in situations where “a settlement fail is caused by factors not attributable to the participants to the transaction or where a transaction does not involve two trading parties”.

Furthermore, it specifies that cash penalties should be calculated either until the end of the buy-in process, if the Commission has adopted the relevant implementing act, or until the actual settlement date, whichever is earlier.

The proposal continues to amend matters relating to third-party CSDs, the passporting regime and banking-type ancillary services.

The International Securities Lending Association (ISLA) has announced that it will be reviewing the proposal within the Market Practice Steering Group and Regulatory Steering Group.

To accompany the package, the EC has also issued a chapeau communication and Q&As, as well as an impact assessment and a summary of the impact assessment.
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