settlement fails reporting

ECSDA issues 2023 penalties calendar

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:

End of appeal period – 10th PBD
Monthly report – 14th PBD
Payment date:
a. 17th PBD until February penalties, e.g., March payment
b. 18th PBD from March penalties, e.g., April payment

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 issues its updated CSDR Penalties Framework

On 5 October 2021, the European Central Securities Depositories Association (ECSDA) publishes the updated version of the ECSDA CSDR Settlement Fails Penalties Framework.

The Framework is the effort of compliance with the Regulation and harmonisation of settlement penalties mechanisms across CSDs subject to CSDR or regulation alike and constitutes a market practice focusing on the settlement fails related requirements in the Central Securities Depositories (CSDs) Regulation and its Regulatory Technical Standards on Settlement Discipline, aiming at improving “the safety and efficiency of securities settlement”.

The current version of the document provides the changes in comparison with the previous one highlighted in grey and the assumptions pending ESMA and EC feedback in yellow.

ECSDA also makes public operational details of CSDs Settlement Discipline implementation via a questionnaire, regularly updated.

ECSDA CSDR Penalties Framework last updated 05/10/2021
ECSDA response to practical questions of CSD participants on CSDR penalties implementation – last updated 20/09/2021

ECSDA updates the draft CSDR Settlement Discipline Penalties Framework

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:

ECSDA CSDR SDR Penalties Framework key considerations
Penalties lifecycle and business days calendar
Penalties scope
Identification of the party to be penalised
Reference/static data required for penalty calculations
Penalties currencies conversion needs
Calculation methods of the cash penalties
Changes to previously calculated penalties
Cross-CSD settlement fails
Collection & Redistribution of penalties (Payment)
Reporting

Other supporting information is also provided in the framework.

ECSDA answers ESMA on settlement fails reporting

The European Central Securities Depository Association (ECSDA) welcomes the issuance of this Consultation Paper on the guidelines of Fails reporting under Article 7(1).

As we share the need of addressing some discrepancies and pitfalls in the fails reporting, we thank ESMA for having taken this initiative of harmonising the fails reporting requirements. Beyond the mere purposes of the settlement fails reporting, the proposed guidelines also influence certain provisions related to settlement discipline measures.

We would like to use the opportunity of the consultation:
1. to provide feedback on the most important aspects of the regulatory reporting, as well as
2. to stress the relevance of some issues, which are not tackled in the consultation paper.

Main points on the regulatory reporting:

I. We would generally advise to carefully balance costs vs. benefits of the reporting and limit the granularity of the information to what is fundamentally necessary for further actions of competent authorities.

II. We stress the fundamental importance of having more clarity on the instrument and instruction scope of the fails reporting, as well as the scope of other settlement discipline measures.

III. We believe that the scope of the requirements should be limited to transactions in financial instruments which the parties settle in an EU CSD. Hence, transactions where the actual place of settlement is outside of an EU CSD should be considered as out of scope of the reporting by EU (Investor-)CSDs.

IV. We would kindly ask for providing the definition of the ISO 20022 or XML message (draft) format to be used for reporting, as soon as possible and ahead of the issuance of the final version of these guidelines. Else, we fear that the timely compliance with the guidelines would be at risk.

Read the full document.

ECSDA meets stakeholders on CSDR Penalties Framework

On Monday 18 February ECSDA had a dialogue with stakeholders on the ECSDA CSDR Penalties Framework. Updated version 17 April 2020

The workshop gave the opportunity to various industry associations to provide valuable input and questions that ECSDA will take into consideration for the next version of its framework document.

ECSDA slides
SWIFT slides