07.28.2020

ESMA Looks To Delay CSDR Settlement Discipline Regime

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is working on a proposal to possibly delay the entry into force of the CSDR settlement discipline regime until 1 February 2022. This is due to the impact of the COVID-19 pandemic on the implementation of regulatory projects and IT deliveries by CSDs and came as a request from the European Commission.

This measure would be additional to the delay foreseen in the ESMA Final Report on RTS on postponing the date of entry into force of the Commission Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) until 1 February 2021. This has been endorsed by the European Commission on 8 May 2020 and it is subject to the non-objection of the European Parliament and of the Council until 8 August 2020.

The RTS on settlement discipline cover measures to prevent and address settlement fails including:

  • rules for the trade allocation and confirmation process,
  • cash penalties on failed transactions,
  • mandatory buy-ins, and
  • monitoring and reporting settlement fails.

Next steps

ESMA aims to publish the final report on further postponing the date of entry into force of the RTS on settlement discipline by September. Following the endorsement of the RTS by the European Commission, the Commission Delegated Regulation will then be subject to the non-objection of the European Parliament and of the Council.

Source: ESMA

Related articles

  1. Operational risk has been mitigated, but there are constraints around teamwork and creativity.

  2. AFME said the COVID-19 recovery is being led by record issuance of investment grade securities and ESG bonds.

  3. Social factors are seen as having a critical and positive impact on long-term value creation.

  4. Machines 'Learn' Liquidity

    Government intervention was an important factor in restoring liquidity.

  5. Buy Side Forced to Review Collateral Arrangements

    Margin calls increased due to volatility caused by the Covid-19 pandemic.