The European Securities and Markets Authority (ESMA) published today a final report that specifies the scope of Central Securities Depositories Regulation (CSDR) cash penalties, supporting the simplification and burden reduction in post-trading.
In line with the revised settlement discipline framework set out in CSDR Refit, ESMA provides technical advice to the European Commission (EC) on the scope of settlement discipline, identifying:
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the causes of settlement fails that are considered as not attributable to the participants in the transaction, and
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the circumstances in which operations are not considered as trading.
According to the technical advice, a broad range of scenarios would not trigger CSDR cash penalties. These include:
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technical failures at the CSD level, such as system outages, cyberattacks, or network disruptions;
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full-day trading suspensions of an ISIN on its most liquid market;
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technical creation and redemption of fund units or shares on the primary market, including those related to Exchange-Traded Funds (ETFs).
Next Steps
The EC will consider ESMA’s technical advice when preparing a new delegated act supplementing CSDR further specifying the scope of operations and transactions subject to the settlement discipline regime.
