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ESMA Report on CSDR Settlement Discipline

AUTHORs: Richard Kelly co-author(s): Alan Bunbury DATE: 27/06/2022

Most of the Central Securities Depositary Regulation (CSDR) settlement discipline regime has applied from 1 February 2022. We wrote in November last year about delay in the application of the CSDR mandatory buy-in regime in particular.

In December, ESMA  published a statement to clarify that while the application and supervision of most CSDR settlement discipline requirements, in particular the settlement fails reporting and the cash penalties regimes, would go ahead as planned, ESMA expects authorities not to prioritise supervisory actions in relation to the application of the buy-in regime.  

ESMA has now published a Final Report on amending the regulatory technical standards (RTS) on settlement discipline to effect postponement of the buy-in regime for three years.

The proposed amendment is based on the expected changes to the regime presented in the Commission’s legislative proposal for the CSDR Review and on the amendment made to CSDR through the DLT Pilot Regulation, which allows ESMA to propose a later start date for the CSDR buy-in regime.

ESMA’s statement from December 2021 referred to above will remain in place until the buy-in regime is formally suspended.

The draft RTS will be sent to the European Commission for endorsement in the form of a delegated regulation, which will then be subject to the non-objection of the European Parliament and of the Council.

The move towards clarity on this issue is to be welcomed. We will continue to monitor progress.

For further information, please contact Richard KellyWilliam FootChristian DonaghTurlough Galvin, Daniel Peart, Alan KeatingVincent McConnonAlan Bunbury or your usual Matheson contact.