ESMA further postpones implementation of CSDR SDR until 2022
28 August 2020 Brussels
Image: BillionPhotos.com/ Adobe Stock
The European Securities and Markets Authority (ESMA) has published a final report on draft regulatory technical standards (RTS) to postpone the implementation of the Central Securities Depositories Regulation (CSDR) settlement discipline regime until 1 February 2022.
In its final report, ESMA highlights the 鈥渟evere impact鈥� of the ongoing COVID-19 pandemic on the overall implementation of regulatory and IT projects by central securities depositories (CSDs) and their participants as well as by other financial market infrastructures.
ESMA explains it would be 鈥渆xtremely difficult鈥� for market stakeholders to comply with the requirements of the RTS on settlement discipline by 1 February 2021.
This follows ESMA鈥檚 announcement in July when it confirmed it was working on a proposal to possibly delay the entry into force of the CSDR settlement discipline regime as well as a request from the European Commission.
The RTS on settlement discipline covers 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.
In terms of next steps, ESMA says that 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 European Council.
In its final report, ESMA highlights the 鈥渟evere impact鈥� of the ongoing COVID-19 pandemic on the overall implementation of regulatory and IT projects by central securities depositories (CSDs) and their participants as well as by other financial market infrastructures.
ESMA explains it would be 鈥渆xtremely difficult鈥� for market stakeholders to comply with the requirements of the RTS on settlement discipline by 1 February 2021.
This follows ESMA鈥檚 announcement in July when it confirmed it was working on a proposal to possibly delay the entry into force of the CSDR settlement discipline regime as well as a request from the European Commission.
The RTS on settlement discipline covers 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.
In terms of next steps, ESMA says that 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 European Council.
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