Monday, November 23, 2020
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ESMA Preparing to Further Postpone CSDR Settlement Discipline

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, confirmed today that it is working on a proposal to possibly delay the entry into force of the CSDR settlement discipline regime until February 1, 2022.

The new delay would be due to the impact of the COVID-19 pandemic on the implementation of regulatory projects and IT deliveries by CSDs and came as a request from the European Commission.

This measure would be additional to the delay foreseen in the ESMA Final Report on RTS on postponing the date of entry into force of the Commission Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) until February 1, 2021. This has been endorsed by the European Commission on May 8, 2020 and it is subject to the non-objection of the European Parliament and of the Council until August 8, 2020.

The RTS on settlement discipline cover measures to prevent and address settlement fails including:

  • rules for the trade allocation and confirmation process;
  • cash penalties on failed transactions;
  • mandatory buy-ins; and
  • monitoring and reporting settlement fails.

Next steps

ESMA said it aims to publish the final report on further postponing the date of entry into force of the RTS on settlement discipline by September. Following the endorsement of the 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.

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