Today, 28 April 2023 ECSDA issued the update of the ECSDA CSDR Settlement fails Penalties Framework.
The change takes into account the postponement of the collection of payment by CSD participants giving them an additional day to collect the payment from the underlying customers:
The European Central Securities Depositories Association (ECSDA) issues the 2023 calendar, which can be found below.
In the calendar, you will find highlighted the key dates of the penalties life cycle as follows:
The payment date will be postponed by 1 PBD, from March penalties, e.g., April payment, as a result of the activity in the Calendar TF with industry associations.
We take the opportunity to thank AFME, EACH, AGC, EFAMA, IA Members, and other associations participating in the Industry Settlement Fails Penalties Calendar task force and look forward to working with you in the future.
We wish you a happy year-end holiday!
The ECSDA team
ECSDA welcomes the ESMA initiative of consulting the relevant stakeholders on the change of the dedicated penalties collection and distribution process for cleared transactions, as currently foreseen under Article 19 of Commission Delegated Regulation (EU) 2018/1229 (CDR).
ECSDA is generally supportive of the ESMA proposal. In addition, the following elements are essential for CSDs:
In the interest of clarity, we suggest structurally clarifying the treatment of CCP transactions and penalties in CSDR itself, ideally as part of the CSDR Refit exercise.
After extensive evaluation and considering wide-ranging discussions of recent days, the CSDs have agreed in principle on a process for February penalties. Below we outline the timeline for the February penalties process and some of the elements that CSDs took into account.
Acknowledging the AFME proposal of last Friday (March 11), the CSDs confirmed their agreement and possibility to proceed with collection and distribution for payment date on 13 April.
The resulting timeline of the process:
*The dates decided by the CSDs are communicated by them to the participants.
Useful documents:
Dates for reporting of Monthly Net amounts. (Last updated on 31 March 2022. The overview of the CSD preferences is updated intra-day, upon reception of information; we hope to complete the document on 18 March, at the latest. Please refer to the relevant CSD communication as the ultimate source of information.)
ECSDA April calendar for March penalties (for Easter holidays). (Last updated on 30 March 2022.)
On 26 August 2020, ESMA released its Final Report CSDR RTS on Settlement Discipline that provides explanations for the proposal to postpone the entry into force of the RTS on settlement discipline until 1 February 2022.
It is sent to the European Commission, and ESMA is submitting the draft RTS presented in Annex IV for endorsement in the form of a Commission Delegated Regulation, i.e. a legally binding instrument applicable in all Member States of the European Union. Following the endorsement of the draft 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.
On 4 February, the European Securities Market Authority, ESMA, has published the Final Report “CSDR RTS on Settlement Discipline – postponed entry into force”.
The report provides explanations for the proposal of delay of the implementation of the RTS on settlement discipline, initially foreseen on 13 September 2020.
ESMA acknowledges the need for relevant stakeholders to be provided with more time to prepare the implementation of the Settlement Discipline.
This is due in particular to:
Considering all the above-mentioned elements, ESMA officially proposes (see Annex II of the report) the postponement of the date of entry into force of the RTS on settlement discipline until 1 February 2021.
Next steps:
The ECSDA CSDR Penalties Framework Workshop will take place on Thursday, 13 February at Clearstream, Mergenthalerallee 61, 65760 Eschborn (Frankfurt), Germany.
On 3 July 2019, ECSDA published the updated version of the draft ECSDA CSDR Settlement Discipline Penalties Framework. The updated version of document can be found here.
The main chapters in the ECSDA Draft CSDR Settlement Discipline Penalties Framework include:
Other supporting information is also provided in the framework.