ECSDA response to ESMA Consultation on DLT Pilot Regime application guidelines
Today, 9 September 2022, ECSDA answers the ESMA Consultation to apply for permission to operate a DLT market infrastructure.
ECSDA response to ESMA consultation on the amendment on Article 19
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:
- that further light is shed on the interaction between CSDR Article 7(11) and the changed Article 19 (and eventually, recital 22),
- receiving the information on the timeline for the entry into force of the regime as soon as possible, and
- that the date of activation of the regime is foreseen on the first business day of the month.
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.
ESMA suggests to postpone Settlement Discipline Standards until 1 February 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.
ESMA requests the Commission to postpone Settlement Discipline to 1 Feb.2021
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:
- New developments needed for the go live of the T2S penalty mechanism (22 November 2020)
- Necessary IT system changes for the updating of ISO messages (22 November 2020)
- Market testing
- Adjustments to legal arrangements between the parties concerned (see Article 20 of RTS)
- Developments related to the implementation of the mandatory buy-in process, foreseen by the CSDR settlement discipline
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:
- This amendment to the RTS will be submitted to the European Commission for review and endorsement.
- This will be followed by the non-objection period by the European Parliament and Council before the publication in the EU Official Journal and subsequently entry into force.
ESMA consults on settlement guidelines
On 20 December, ESMA has published two Consultation Papers dedicated to CSDR (Regulation (EU) 909/2014) Settlement Discipline requirements:
- on Guidelines on settlement fails reporting, and
- on Guidelines on standardised procedures and messaging protocols.
The consultations are open until 20 February 2019.
You can find the consultations on the linked ESMA web pages.
ESMA updates the Questions and Answers on CSDR
On 12 November 2018, ESMA has updated his Questions and Answers (Q&As) with regard to the implementation of the Central Securities Depository Regulation (CSDR).
The new entries cover the CSD passporting and Settlement Discipline cash penalties.
See the complete updated ESMA CSDR Q&As following this link.
ESMA issues updated Q&A on the CSD Regulation
In brief, the new/modified Q&A says:
- Links shall be assessed in compliance with the CSDR by the time of the CSD application for authorisation under CSDR
- Communication standards requirement to use international standards is limited to :
a) the machine-to-machine communication
b) communication where international, fair and open standards exists
c) where the CSD cannot/does not provide evidence that the international standards are less efficient. It is possible to use other standards if they are more efficient - CSD links should not be qualified as interoperable links only because of the participation of the two CSDs in T2S. T2S links are deemed interoperable only for T2S-related aspects.
Please see the full document
ECSDA issues proposal on settlement discipline
22 May 2014 – European CSDs make concrete proposals for building a workable European settlement discipline framework. …