Category: General

CMU HLF published its final report

CMU HLF published its final report

On 10 June, the High-Level Forum on the Capital Markets Union organised under the hospices of the European Commission published its final report.

The report consists in 17 recommendations put forward with the intent of addressing relevant issues related to corporate access to finance, pan-European market architecture, retail investment and cross-border investment.

Recommendation on CSDR
The European Commission is invited to conduct a targeted review of Central Securities Depositories Regulation (CSDR) to strengthen the CSD passport and facilitate the servicing of domestic issuance in non-national currencies. This should be accompanied by measures to strengthen the supervisory convergence among National Competent Authorities (NCAs). These measures, taken jointly, should enhance the cross-border provision of settlement services in the EU.

Justification
A targeted review could usefully tackle the following issues:

  1. CSD passporting and links
    While the objective of CSDR is to create a “common CSD market” free of regulatory barriers and to offer CSDs a European passport, divergent application by NCAs of the rules according to which (I)CSDs should meet CSD links framework requirements and provide services in another Member State creates procedural and regulatory hurdles, fragmenting the post-trade landscape along national lines.
  2. Cross-border payments and access to Central Bank and commercial liquidity
    The CSDR has unintendedly limited access to global liquidity pools for CSDs without a “limited purpose banking license”. Consequently, these CSDs cannot service domestic issuance in other currencies, including sovereign debt. The CSDR foresees the possibility for CSDs without a banking licence to appoint a “designated credit institution”. However, such liquidity providers have not emerged yet. National Central Banks (NCBs) should facilitate non-domestic (I)CSDs to process settlement in Central Bank Money in other currencies (including those frequently used for issuance and settlement: GBP, CHF, USD), after taking due account of the implications of such access. Alternatively, the CSDR restrictions that prohibit CSDs holding a banking license to provide such services to other CSDs could be amended.
  3. Supervision of CSDs
    Divergence in national supervisory approaches is still an important fragmentation factor in the provision of settlement services that generates costs and limits the cross-border offer. Given that securities laws are not harmonised across EU 27, NCAs still have a role to play. Therefore, ESMA’s work within the current scope of its mandate in terms of convergence should be continued and strengthened. The aim should be to ensure convergence in supervisory approaches across the Member States to reduce administrative burdens on CSDs and to generate the value added for the EU financial markets in terms of the CSDR objectives.

Please read the full report

Euronext purchases majority stake in VP Securities

Euronext purchases majority stake in VP Securities

On 23 April 2020, Euronext N.V. announced that they have entered an agreement to acquire 70% of the share capital in VP Securities.

As a result of this transaction, VP will become a part of a leading, pan-European market infrastructure company with extensive expertise within the financial infrastructure value chain, as well as exchanges, Central Securities Depositories (CSDs), corporate actions and other investor services. Euronext already has a presence in the European CSD market through Euronext VPS in Norway and Interbolsa in Portugal.

VP Securities release
EURONEXT release

LuxCSD receives the CSDR licence

LuxCSD receives the CSDR licence

On 15 April, LuxCSD, the Luxembourg central securities depository (CSD) member of ECSDA obtained a licence to operate under the Central Securities Depositories Regulation (CSDR).

Please see the release.

The list of CSDs authorised under the CSDR is provided on the CSD Facts page of the website.

Clearstream Banking AG (Germany) receives the licence under CSDR

Clearstream Banking AG (Germany) receives the licence under CSDR

On 21 January 2020, BaFin granted Clearstream Banking AG, as German Central Securities Depository, the licence according to Article 16 Central Securities Depository Regulation (Regulation (EU) No 909/2014) – CSDR. The licence authorises the company to provide core services and non-banking-type ancillary services under the CSDR.

Read the full announcement.

Read the official Clearstream/Deutsche Börse Group Media release.

The list of CSDs authorised under the CSDR is provided on the CSD Facts page of the website.

#ECSDA2019: a day towards financial infrastructures of tomorrow

#ECSDA2019: a day towards financial infrastructures of tomorrow

With a line-up of prestigious speakers, panellists and moderators, ECSDA attracted over 190 participants at the Auditorium of the National Bank of Belgium in Brussels on 20 November 2019. The headline of the conference “Towards the Financial Infrastructures of Tomorrow” couldn’t have been chosen better to reflect the core of all presentations, panel discussions and updates.

CMU
The first panel focused on how to deepen Capital Markets Union, and how post-trade could contribute to making the capital flows as easy as movements of persons in Schengen. Existing barriers to further harmonisation, most important being for the insolvency laws and fiscal matters, have been extensively discussed, and there seems to be an overall agreement that the next steps will take time and political willingness to move forward towards a deeper Capital Markets Union. Cross-currency fragmentation remains significant and needs to be overcame.

Regulation, regulation and regulation
Some market infrastructures admitted quite a degree of fatigue after two-three years of heavy efforts on the CSDR implementation. On the other hand, they feel stronger today and better prepared towards the many challenges still ahead. In the debates around the CSDR aftermath, the regulators defend a need for further efforts to preserve a safe and risk-protected post-trade financial system. We learned that a gap analysis between the EU CSDR and the global Principles for FMIs is ongoing. For the review of CSDR, most opinions defend a level of detail that is rather moderate compared to a complete overhaul of the regulation. The regulators view is that it will be a balancing act: CSDR is there to stay, and with the help of the continuously ongoing efforts of representatives and partners such as ESMA, and the different ECSDA Working groups, the foundations are being laid towards CSDR II.

Tomorrow’s Market Infrastructures
The cherry on the cake came with the afternoon elite panel, featuring no less than the Euroclear Group’s CEO, Lieve Mostrey, Deutsche Börse group ExCo member responsible for post-trading, Stephan Leithner, the new ECB’s Director General for Infrastructure, Ulrich Bindseil, and the National Central Bank Director overseeing the Euroclear group, Tim Hermans. Topics such as consolidation, collaboration, harmonisation, innovation and also co-competition were covered from different angles, and we heard loud and clear that smaller market infrastructures ask for an inclusive agenda on the road to the future. Technological challenges for market infrastructures are high on the priority list, but you don’t turn an aircraft into an agile drone overnight.

Innovation and technology
After an expert view on tokenisation and custody of digital assets, which made clear that DLT is definitely there to stay; a last series of presentations covered ID2S’ trajectory as a ‘new kid on the block’; Monte Titoli/LSE’s Data & Analytics journey; and SDX SIX and SWIFT’s digital proposals to bring further value to the global financial eco-system. The panel has broadened the concept of innovation beyond Artificial Intelligence and Blockchain towards crafting new business models and rethinking the eco-systems. The discussions also revealed unanimity about regulation ‘equal for all’: start-up settlement and custody providers must undergo the same regulatory and other requirements as the incumbents. We noted the wise words of ID2S that the CSDR licence is not a burden for a start-up, but a pre-condition of trust granted by their investors and users.

The panellists encouraged to start a joint work on the legal framework for crypto assets, their asset servicing standards, governance and principles for interoperability as immediate priorities. We also noted a warning to watch out for a crypto-assets’ misclassification, e.g. between utility and security tokens, leading to an inaccurate legal regime.

The conclusions from the ECSDA Chairman and a networking cocktail wrapped up an inspiring day.

It was an energizing day full of content about where financial market infrastructures are heading to, what topics are high on their agenda’s and how they are preparing to be future proof. A warm thank you to the speakers, moderators and panellists for their rich interventions, as well as to the organising team that did their utmost for a flawless organisation of the day.

A printable version of the summary can be found here.

Some insights about the Conference can be found on the ECSDA Twitter.

Mathias Papenfuß, Brigitte Daurelle and Indars Aščuks re-elected ECSDA Chair and Vice-chairs

Mathias Papenfuß, Brigitte Daurelle and Indars Aščuks re-elected ECSDA Chair and Vice-chairs

Gathering in Bucharest during the European Union Romanian Presidency, for the Annual General Meeting on 16 May 2019, representatives of 40 CSDs elected the Board of Directors and the Executive Committee of the European Central Securities Depositories Association (ECSDA).

ECSDA Board Directors re-elected Mathias Papenfuß (Member of the Executive Board Clearstream Banking) as its Chairman, Brigitte Daurelle (CEO Euroclear Belgium, France and Nederland) and Indars Aščuks (CEO of Nasdaq CSD) as its Vice-Chairs and Georg Zinner (Managing Director of OeKB CSD) as Treasurer of the Association.

Commenting on his re-election, Mathias Papenfuß said:

“I am grateful for the continued trust ECSDA members have expressed by re-electing me as Chairman. I have been involved in ECSDA’s activities since the foundation of the association in the late 1990s and I am convinced that our association is more relevant than ever to help CSDs cope with the accelerating pace of market and technological changes and regulatory pressure.

During the previous three years, we have witnessed an unprecedented level of harmonisation of CSD activities, enhancement of their risk management and operational resilience, based on the pan-European legislation. On this basis, I expect that, during the next three years, we will see further enhancements and modernisation of CSD activities, stronger competition and more work on the efficiency of the European financial market infrastructures contributing to a deeper Capital Market Union.”

At the same meeting, ECSDA Board has established the list of Executive Committee members, as follows:
– Francisco Béjar Nuñez, Iberclear
– Helena Čacká, CSD Prague
– Rui de Matos, Interbolsa
– Mauro Dognini, Monte Titoli
– Dora Matošić, SKDD
– Niels Olsen, VP Securities
– Nikolaos Porfyris, ATHEX CSD
– Boris Tomaž Šnuderl, KDD
– Andrea Tranquillini, ID2S

More information:

Printable version of the press release (PDF)
Pictures of Mathias Papenfuß and of the other ECSDA Executive Officers
List of ECSDA Board members
List of Executive Committee members

ECSDA Board Meeting and Ordinary General Meeting in Bucharest, 16 May 2019
ECSDA welcomes ID2S as a new member

ECSDA welcomes ID2S as a new member

ECSDA is pleased to welcome ID2S as a new member having joined the association.

On Tuesday 27 November, the ECSDA Extraordinary General Meeting has approved ID2S as a new member. ID2S Chief Executive Officer, Andrea Tranquillini, becomes ECSDA new Board member.

The French CSD, has been recently authorized under the EU CSD Regulation to provide central securities depository services for the Negotiable European Commercial Paper (NEU CP) market, and hence was eligible to become an ECSDA member. ID2S was formed by combining the expertise of a telecom company and a developer of an MTF for commercial papers Orange S.A and SETL, as a provider of transactional services based on blockchain technology.

ID2S uses IT technology based on blockchain solutions as operated by SETL. Since recently, it is also connected to T2S and provides ancillary services adapted to NEU CP.

Learn more about ID2S from the interview of Thiebald Cremers, Director Legal and Public Affairs at SETL France, on the occasion of the ECSDA Technology day on 27 November 2018  – Read the full interview