ESMA Proposes To Further Postpone CSDR Settlement Discipline
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published a final report on draft regulatory technical standards (RTS) definitively postponing the date of entry into force of the Commission Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) until 1 February 2022.
This postponement is due to the impact of the COVID-19 pandemic on the implementation of regulatory projects and IT deliveries by Central Securities Depositaries and a wide range of market participants and follows a request from the European Commission (EC).
📤 It's out! Final report on draft regulatory technical standards (RTS) definitively postponing the date of entry into force of RTS on settlement discipline until 1 Feb. 2022.
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) August 28, 2020
The measure is additional to the Commission Delegated Regulation (EU) 2020/1212 , based on ESMA’s proposal to amend the RTS on settlement discipline to postpone its date of entry into force from 13 September 2020 to 1 February 2021.
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 of settlement fails.
Following the endorsement of the RTS by the EC, the Delegated Regulation will then be subject to the non-objection of the European Parliament and of the Council.
Central Securities Depositories Regulation is a step towards harmonization in European post-trade.
CSDR settlement discipline regime has mandatory buy-in rules.
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Participants need to avoid penalties when CSDR when it comes into full effect in 2022.
The European Association of Clearing Houses said provisions are inaccurate, redundant and burdensome.