On Tuesday 20 December, the Member States’ ambassadors to the EU (Coreper) agreed on their negotiating position on a proposed update of the ‘CSDR’ Regulation on Central Securities Depositories (CSDs).
“The Council wants to simplify the rules underpinning these settlements while preserving financial stability. This will make central securities depositories more efficient and competitive”, commented the Czech Minister for Finance, Zbyněk Stanjura, in a statement.
The aim of this revision, presented by the European Commission in March 2022 (see EUROPE 12912/24), is to make the regulation of EU securities more efficient by simplifying requirements and clarifying authorisation processes.
The revision provides that the home Member State, i.e. the one where the CSD is authorised, will ultimately decide on the CSD’s application to provide cross-border services. If the activity of the CSD is considered to be of substantial importance for the functioning of the securities markets and the protection of investors in at least two other Member States, a college of supervisors will be mandatorily set up.
This will facilitate the exchange of information between supervisors and ease the cooperation between Member States’ authorities. The European passport scheme will be clarified and the timeframe shortened to facilitate the provision of a wider range of services in the Member States.
The proposal also further streamlines rules on so-called ‘mandatory buy-in’: where a transaction has failed to settle at the end of a prescribed period, the buyer of the securities could be forced to repurchase them elsewhere. The failing party would then be required to meet any price differential between the original and new transaction and all costs of the mandatory buy-in. The mandatory buy-in would be a new measure of last resort, to be activated only in the case where the level of settlement fails would be substantial in the EU.
The European Parliament has yet to take a position. (Original version in French by Anne Damiani)