Investment Operations

ESMA PROPOSES AMENDMENT TO SIMPLIFY CSDR PENALTY PROCESS FOR CLEARED TRANSACTIONS

The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published a Final Report on amending the regulatory technical standards (RTS) on the Settlement discipline, to simplify the cash penalties process by putting the CSDs in charge of collection and distribution, including for CCP-cleared transactions.

The proposed amendment would remove the CCP-run separate process established in Article 19 of the RTS for the collection and distribution of cash penalties for settlement fails on cleared transactions. It would also put the CSDs in charge of the entire process of collecting and distributing penalties according to Articles 16, 17 and 18 of the same regulation, establishing a single harmonized process for all transactions (both cleared and uncleared).

Next steps

This draft RTS will be sent to the European Commission (EC) for endorsement in the form of a Commission Delegated Regulation. Following its endorsement by the EC, the Commission Delegated Regulation will then be subject to the non-objection of the European Parliament and of the Council.