The European Association of CCP Clearing Houses (EACH) has responded today to the ESMA consultation on the amendment of Article 19 Settlement Discipline Regime (SDR).
EACH welcomes the ESMA proposal for a more efficient, less legally and operationally risky, and less costly single penalties collection and distribution mechanism, via the amendment to Article 19 SDR. Furthermore, EACH members also welcome the proposal to give CCPs the legal remit to recover any losses from imbalances, and that CCPs can establish the accompanying mechanism in their rulebook. This is important for EACH, as these losses stem from penalties, where failure to deliver was not the fault of the seller.
In addition to welcoming the amendment and its objectives, EACH proposes a small number of editorial changes designed to:
- Furthering alignment between the amendment and the Level 1 legislation (CSDR)
- Furthering legal certainty and clarity in the amendment, for instance, on CSDs performing all steps associated with penalties collection and distribution.
For more information, please click here to download the EACH response or visit the EACH website at www.eachccp.eu.
