European Central Securities Depositories Regulation (CSDR) – Implementing discipline measures

CSDR discipline measures are scheduled to come into force in September 2020. Their purpose is to ensure that securities settlement transactions conducted by CSDs are settled on the date originally agreed by the parties. A penalty is applied for each day that a transaction fails to be settled. If the delay persists despite the penalties, a buy-in process is initiated to ensure that the non-defaulting party can recover its securities, with the defaulting party bearing the associated costs.

AMAFI has always lobbied for a regime of this kind to be introduced at European level, since proper transaction settlement is critical to market integrity and public confidence. But the conditions are not in place right now to support a smooth introduction of this regime. Collectively, financial system participants will not be ready by September 2020. Meanwhile, uncertainty remains over the buy-in mechanism. For this reason, AMAFI and a number of other European associations wrote a joint letter on 22 January to the European Commission and ESMA calling for a review of the process for introducing the new regime (AMAFI / 20-07).