Settlement discipline, cross-border provision of services, supervisory cooperation, provision of banking-type ancillary services and requirements for third-country central securities depositories

The International Securities Lending Association (ISLA) welcomes the opportunity to comment on the Proposal, amending Regulation EU No. 909/2014 – The Central Securities Depositories Regulation, with regards to rules surrounding the Settlement Discipline Regime, as well as supporting the Capital Market Union’s overall goal to develop a single EU capital market, with its core objective to increase settlement…

Firstly, we would like to share the following observations on the application of the cash penalty regime a. From the monitoring that has been performed since the application of the cash penalty regime on 1 February, it appears - if cash penalties are to be passed on - that investment funds should receive a net credit balance, which is logical as they are net buyers of securities.

The Association of Global Custodians (AGC) welcomes the European Commission’s Proposal for changes to CSDR. The Commission’s Proposal introduces some important and necessary changes - but it can still be improved in some areas.

In terms of entities subject to the settlement penalties, as we elaborated in our Response to the Commissions’ consultation on a Possible Review of the CSDR (run between December 2020 and February 2021), we continue to suggest the removal of CCPs’ responsibility on the collection and distribution of penalties to clearing members affected by the settlement fails, moving this responsibility on CSDs for both cleared…

In terms of entities subject to the settlement penalties, as we elaborated in our Response to the Commissions’ consultation on a Possible Review of the CSDR (run between December 2020 and February 2021), we continue to suggest the removal of CCPs’ responsibility on the collection and distribution of penalties to clearing members affected by the settlement fails, moving this responsibility on CSDs for both cleared…

Bolsas y Mercados Españoles (BME) welcomes the opportunity to provide feedback to the European Commission’s Proposal on CSDR Refit and thus further contribute to creation of the true single market for capital to all members of the European Union. Please kindly refer to the attached file for our views and feedback.

For the further details, please see the full text attached. The EBF welcomes the initiative of the European Commission (EC) to propose changes to CSDR with a view to enhance the efficiency of EU’s settlement markets. In particular, the EBF welcomes the decision not to implement MBIs immediately and to prioritize the use of cash penalties.

AFME welcomes that the European Commission proposes that Mandatory Buy-ins (MBI) will not be immediately implemented. As acknowledged in the Commission’s impact assessment, the implementation of a MBI Regime could have a disproportionately negative impact on the liquidity and competitiveness of EU capital markets.

The Investment Association (IA) welcomes the opportunity to feed back on the proposed changes to the Central Securities Depositories Regulation (CSDR) and in particular, the European Commission’s aim to make the settlement discipline regime more effective and proportionate.

Danske Bank welcomes the CSDR REFIT proposals noting that the proposals address many of the questions and concerns raised by pan-European industry bodies like AFME and ICMA as well as banking associations at EU Level and domestic level, particularly the Nordic banking associations.

GBIC welcomes that mandatory buy-ins (MBI) should not initially apply. Buy-ins intend to protect buyers and therefore belong at trading level. A buyer has a right under national law to claim damages including buy-in costs from a failing contractual party. But it would neither be proportionate nor adequate to oblige all aggrieved buyers always to make use of their right to procure the securities elsewhere.

SIX SIS welcomes the European Commission’s initiative to review the CSDR. The proposal touches on many of the elements that SIX SIS has discussed with EU/EEA Stakeholders. SIX SIS as a member in European Central Securities Depositories Association (ECSDA) is contributing and supporting the harmonisation efforts on European legislative and standards level.

We embrace the EU Commission aim to review the CSDR. We welcome the Commission proposal to improve the mandatory buy-in (MBI) regime as it takes generally into consideration the market feedback provided by the relevant stakeholders (e.g. Asset Manager).

The Futures Industry Association (FIA) and the International Swaps and Derivatives Association (ISDA) (together the Associations) welcome the opportunity to comment on the European Commission’s (EC) proposal to review the Central Securities Depositories Regulation (CSDR), in particular with respect to reforms of the mandatory buy-in regime (MBI) under Article 7 CSDR.

ICMA and its members broadly welcome the proposed revisions to the CSDR, in particular those relating to the mandatory buy-in (MBI) framework. Members believe that the “two-step approach”, in principle, takes into account the potential disruptive market impacts of applying a mandatory buy-in requirement, as well as allowing for more proportionate and targeted initiatives to improve settlement efficiency rates…

The Futures Industry Association (FIA) and the International Swaps and Derivatives Association (ISDA) (together the Associations) welcome the opportunity to comment on the European Commission’s (EC) proposal to review the Central Securities Depositories Regulation (CSDR), in particular with respect to reforms of the mandatory buy-in regime (MBI) under Article 7 CSDR.

Euronext Securities, part of the Euronext Group, welcomes the opportunity to share its views on the CSDR REFIT proposal. We believe that this targeted review is warranted to keep the existing CSD EU regulatory framework fit for purpose and make it more effective on the basis of the experience gained during the first implementation phase (2017-2021).

BNY Mellon welcomes the CSDR REFIT Proposal adopted by the European Commission. We believe that the Proposal introduces important and necessary changes to CSDR. Yet we also believe that the Proposal has some gaps, and can be improved.

Please find the full EACH response attached in pdf, and the executive summary of it below. Introduction: The European Association of CCP Clearing Houses (EACH) represents the interests of Central Counterparties (CCPs) in Europe since 1992. CCPs are financial market infrastructures that significantly contribute to safer, more efficient and transparent global financial markets.

ICI Global Recommendations on the Central Securities Depositories Regulation REFIT ICI Global’s members manage EUR 39 trillion in regulated investment funds around the world, and we have a strong interest in a well-functioning securities market in the EU.

Please see attached file for more extensive comments. We particularly welcome the Commission’s proposal that so-called mandatory buy-ins pursuant to Article 7 of the CSDR should not initially apply. The buy-in is an instrument intended to protect the buyer and therefore belongs at trading level.

AFG highly deserves the publication of the CSDR Refit proposal and more specifically the review of Article 7 provisions on settlement discipline regime which is the central point of attention for our members. The EC has clearly taken onboard a lot of the feedback from market participants buy-side introduced on the structural Flaws in the design of the mandated buy-in (MBI) regime and its potential for intended…

Filed in French · English published by the European Commission

EFAMA warmly welcomes the publication of the CSDR Refit proposal. The EC has clearly taken onboard the feedback from market participants on the structural flaws in the design of the mandatory buy-in (MBI) regime and its potential for unintended consequences on capital market efficiency and resilience.

For the most part, the amendment proposals related to settlement discipline benefit the sector because they harmonise the operating principles of market participants from different markets. They also promote the simultaneity of securities trade and related payments, which will improve investor protection and reduce the risks of market participants.

The Nordic Securities Assosiation supports that the provisions related to settlement discipline are reviewed in order to make sure they enable an efficient functioning of the financial markets, which will improve investor protection and reduce the risks for market participants.

Finance Denmark welcomes the revised proposal and that it includes issues raised by the sector in previous consultations. We still believe that the buy in regime is very flawed, impossible to implement, unproportionally expensive and ineffective means to improve settlement quality.

Euroclear supports the Commission’s aim to further enhance the efficiency and competitiveness of post-trade markets in the EU. Hence, we welcome the opportunity to provide feedback on the CSDR REFIT proposal. We would like to refer to the feedback statement which will be submitted by the European CSD Association (ECSDA) and to which we participated.

GDV welcomes the opportunity to provide feedback on the Commission's proposal for a regulation amending the Central Securities Depositories Regulation (CSDR). Insurers as Europe's largest institutional investors in-vest extensively in securities and therefore have a great interest in a safe and efficient financial market infrastructure, where the CSDR has played a significant role in developing this infrastructure.

SSMA’s comments focus on CSDR article 7 and the delegated regulation (EU) 2018/1229 (the RTS). We are of the opinion that penalties is a better tool for addressing settlement fails than mandatory buy-ins (MBI) and would therefore recommend a removal of the overall MBI provisions.

Boerse Stuttgart Group is the sixth largest exchange group in Europe with strategic pillars in the capital markets business as well as in the digital & crypto business, which is the largest of all European exchange groups.

ISLA and its members would like to take this opportunity to highlight the significance of incorporating a review of the Settlement Discipline Regime (SDR), as highlighted in the Roadmap, in particular Mandatory Buy-ins, (that apply from February 2022, and hence not yet live), as part of the wider CSDR Refit, however we would also stress the importance of a review of this particular element, prior to implementation…

BNY Mellon welcomes the planned review of CSDR. We believe that CSDR has played an important role in the development of safe and efficient financial market infrastructure in Europe, and that there is scope to modify CSDR in order for the objectives of CSDR to be met in a more effective and efficient manner.

ISDA and FIA (the ‘Associations’) welcome the opportunity to provide feedback to the European Commission’s (EC) consultation on the CSDR inception impact assessment (Roadmap). The Associations welcome the opportunity to provide their views to the EC on revising the CSDR framework, especially regarding the scope of the mandatory buy-in requirements as part of the Settlement Discipline Regime (SDR).

ISDA and FIA (the ‘Associations’) welcome the opportunity to provide feedback to the European Commission’s (EC) consultation on the CSDR inception impact assessment (Roadmap). The Associations welcome the opportunity to provide their views to the EC on revising the CSDR framework, especially regarding the scope of the mandatory buy-in requirements as part of the Settlement Discipline Regime (SDR).

EBF Members welcome the possibility to provide feedback on the review of EU rules to improve the cross-border provision of settlement services in the EU, which they see as a key component of the 2020 Capital Markets Union Action Plan. In this context, EBF members are of the view that a top priority level should be given to the review of the settlement discipline framework.

AFTI members’ main concerns are the following: - Cross-border provision of services While from a global perspective, CSDR did encourage cross border developments and services by CSDs, CSDR itself is not sufficient to create complete harmonization and we have witnessed an increase of the overall post-trade costs.

We are pleased to provide our comments on the CSDR roadmap and would take this opportunity to draw EC attention on four specific issues extremely critical for us. For more details on our stance on the CSDR review as a whole (including internalized settlement and scope) please see our response to the recent targeted consultation.

Deutsche Bank welcomes the opportunity to provide feedback on the CSDR Roadmap and proposal for the CSDR REFIT. Our priority is the Settlement Discipline Regime (SDR). Whilst we appreciate the rules are yet to enter into force we believe there are fundamental issues which the CSDR Refit has the opportunity to address in order to ensure the safe and effective implementation of the regime.

Settlement Discipline Framework AFME believes that changes to the Settlement Discipline Regime (“SDR”) should be considered the key priority of the CSDR Refit. Although the rules have not yet entered into force, there are fundamental issues with their current form. The CSDR Refit presents a perfect opportunity to make targeted amendments to the SDR to ensure its effectiveness from day one.

BVI welcomes the initiative by the EU Commission to review the regulatory regime of CSDR. German investment fund managers acting on behalf of regulated investment funds (UCITS/AIFs) are important users of the securities markets in the EU. German investment fund management companies are not directly involved in the value chain of clearing and settlement of securities transactions.

1. Scope of regulation – buy-in procedure requires trading participants/partners in particular? Commission delegated regulation (EU) 2018/1229 explicitly obliges trading participants (Art. 29) or trading partners (Art. 31) to initiate a buy-in.

Introduction On behalf of its wide and diverse international membership (including asset managers and investors, banks and broker-dealers, as well as market infrastructures), the International Capital Market Association (ICMA) would like to take this opportunity to highlight the importance of including Settlement Discipline, in particular the provisions for mandatory buy-ins (MBI), in the Review of CSDR.

LSEG welcomes the opportunity to comment on the European Commission’s Inception Impact Assessment on CSDR Refit. Following our CSDR Review Consultation response we submitted in Feb 2021, we would like to make the following key observations: - CSDR implementation timeline: We believe that the implementation date of February 2022 needs to be further considered to provide adequate time for market participants to…

EACH Response to the European Commission Inception Impact Assessment on CSDR Review: The European Association of Clearing Houses (EACH) has represented the interests of Central Counterparties (CCPs) in Europe since 1992. CCPs are financial market infrastructures that significantly contribute to safer, more efficient and transparent global financial markets.

NSA would like to address three main issues regarding the implementation of the CSDR SDR. Firstly, we would like to underline the urgent need for clarification on the timeline for the review and possible amendments as well as the implementation date of Feb. 1, 2022. Most institutions have three to six months’ notice on amendments to contracts.