Public – ECSDA

Joint EU T+1 Industry Task Force issues its report

Today, ECSDA together with other industry associations is publishing the Joint industry report on the shortening of the settlement cycle to T+1. On this occasion, ECSDA would like to highlight the following key points:

The European CSD Association is very pleased with the finalisation of the joint industry report on T+1. However, the current attempt to define recommendations and requirements in the Joint report shall be considered very preliminary at this stage.
To advance, only an EU-wide governance with a clear mandate will be capable of recommending the necessary changes and defining a reliable timeline for achieving an efficient T+1 settlement cycle. We believe it is necessary to create a structure at the EU level with a mandate from the authorities and reporting to ESMA to adopt the recommendations supported by further operational impact analysis, similar to other countries (ex. UK).
ECSDA believes that the EU should proceed in coordination and alignment with the UK and Switzerland in their adoption of T+1. A clear indication of the date of the move should be made under the appropriate EU governance as soon as possible. However, much depends on the changes to be implemented, and a careful impact assessment must be made, amongst others to consider a potential need for changes in T2S or any other CSD settlement platform.

Please read the full report.

Joint Statement on DORA & definition of ICT Services

ECSDA, AFME, EACH, FESE and FIA are publishing today, 1 October, a joint statement on the scope of ICT services under DORA.

In light of the upcoming DORA application deadline on the 17th of January 2025, all the associations welcome the intention of the Commission and ESAs to provide Q&A clarifications on the definition of ICT services. This should reinforce the widely held understanding that regulated financial services, such as those provided by FMIs, credit institutions and investment firms in their capacity as such, should not be deemed ICT services in the scope of DORA.

The associations recommend the ESAs to reinstate the guidance confirming that regulated financial services should not be treated as ICT services for the purpose of DORA and clarify that regulated financial services include any services and activities subject to the supervision of a financial services regulator including any ancillary or delegated services.

See full text here.

ECSDA updates the Settlement CSDR Penalties Framework

Today, 11 September 2024, ECSDA issues the update of the ECSDA CSDR Penalties Framework.

This version of the document reflects the implementation of the amendment of Article 19 CSDR SDR concerning the collection and redistribution of penalties. As per such amendment, the process applied to non-cleared transactions will now also be applied to cleared ones. ECSDA is pleased to have been able to implement a legislative change allowing for a single regime applicable to both cleared and non-cleared transactions as a result of the thorough discussions with the authorities and CCPs.

The changes in the document are highlighted in light grey, and are mostly covering the removal of specific treatment of cleared transactions.

Please read the full document.

ECSDA responds to the ESMA consultation on CSDR SDR scope

On 9 September 2024, ECSDA responds to the ESMA consultation on CSDR SDR scope and provides its view on what may be considered in the scope of cash penalties application for:

a. Underlying causes of settlement fails that are considered as not attributable to the participants in the transactions
b. Circumstances in which operations are not considered as trading
ECSDA supports the ESMA proposal with some exceptions and highlights the impact that any change introduced might have on market actors, and also warns about the timeline for implementation of such changes.

Read the full document.

ECSDA Responds to the ESMA consultation on Review & Evaluation

On 9 September 2024, ECSDA responded to the ESMA consultation aimed at amending Regulation EU 2017/392 and Regulation EU 2017/394, following the amendments to Article 22 of the CSDR, which were introduced with the CSDR Refit. These amendments concern the periodic review and evaluation process to which CSDs are subjected by their competent authorities (CAs).

The response supports the development of an efficient and globally competitive regulatory framework, with suggestions to ensure consistent and proportionate information flows to competent authorities in the ex-post supervision of CSDs.

Read the full document.

Assocations’ explanatory note on the impact of the US move to T+1 on corporate actions

On 3 September 2024, the European Central Securities Depositories Association (ECSDA) jointly with the Association for Financial Markets in Europe (AFME) and the Federation of European Stock Exchanges (FESE), published a joint explanatory note on the impact of the US move to T+1 on corporate actions processing for multi-listed and multi-traded securities. The key dates for corporate actions of securities issued in North America changed following the settlement cycle reduction to T+1 in May this year.

The Associations identified four scenarios of possible situations faced by European actors in the aftermath of the implementation of T+1 in the other regions. The analysis performed covers all actors within the chain from the Issuer through to the End Investor.

Read the full document.

Register for the ECSDA Conference 2024 in Brussels!

We are excited to announce that the registration for the ECSDA Conference 2024 is now open!

This year’s conference will take place on 19 November at the Auditorium of the National Bank of Belgium (NBB) in Brussels, rue Montagne aux Herbes Potagères 10, 1000 Brussels.

The ECSDA Annual Conference will capitalise upon the achievements of the WFC Meeting organised by ECSDA and CSD Prague in May 2023. It will bring together the CSD ecosystem thought leaders and visionaries, participants and most advanced technological suppliers helping the community in building the European and global financial markets. We will concert the views with the leading European policy-makers and regulators and advise them on the post-trade priorities for building a true single European capital market.
The topics of settlement efficiency and shortening of the settlement cycle, new CMU priorities, FMI interoperability on settlement of Digital Assets and others will be under the attention of the Conference speakers and participants.

For more details and to secure your spot, please visit the conference website. We look forward to welcoming you to Brussels in November!

ECSDA’s call for action on Europe’s Capital Markets Competitiveness

Today, 22 July 2024, ECSDA released its Call for action on Europe’s Capital Markets Competitiveness.

As the EU begins a new political cycle, ECSDA reaffirms its continued support for the further development and revitalisation of the Capital Markets Union (CMU). As Financial Market Infrastructures offering key services to issuers, investors and securities markets, Central Securities Depositories (CSDs) play an integral role in creating a more integrated, efficient and competitive EU capital market.

A number of key reports (Eurogroup, Letta, Draghi, Noyer and ESMA) entail important elements to lay the foundation for the next EU legislative agenda. They also include key recommendations on increasing the attractiveness of the European capital markets for issuers and investors and deepening the liquidity in the region.

ECSDA supports some of the recommendations related to post-trading and agrees that post-trade activities could be more efficient but questions others, especially on solutions for integrating the post-trade. This topic is not new, but a renewed reflection of its relevance may be warranted.

Below, ECSDA identifies some measures that could further strengthen Europe’s capital markets integration and growth from a post-trade perspective. Key elements that continue to act as material barriers to market integration and fragmentation include for instance securities law, market specificities and tax procedures. The EU should therefore rather improve the current realities to empower private sector CSDs to drive natural integration and consolidation via fair cross-border competition. In our view, the European Capital Market deeply benefits from its CSD competitiveness.

In this document, ECSDA provides its views and recommendations on:

the role of CSDs in supporting market integration;
the root causes of post-trade fragmentation;
the impact of forcing further consolidation without addressing the root causes of fragmentation;
the way forward to achieve further integration.

Please read the full document.