MEPs in the Committee on Economic and Monetary Affairs (ECON) examined, on Monday 23 January, amendments to the draft report on the revision of the Regulation governing Central Securities Depositories (CSDs). According to the rapporteur, Johan Van Overtveldt (ECR, Belgian), the compromise is on the right track.
CSDs administer the infrastructure for the settlement of securities in financial markets. This revision, proposed by the European Commission in March 2022, aims to improve the efficiency of EU settlement markets while preserving financial stability (see EUROPE 12912/24).
The key points of divergence between parliamentarians are settlement discipline and supervision. 106 amendments were tabled in addition to the 93 amendments in the draft report.
“The rapporteurs agree that there is significant scope for improving settlement efficiency rates in Europe”, Mr Van Overtveldt said. It is the way in which this is achieved that causes differences.
“I am sceptical about mandatory buy-ins (MBIs)”, he said, adding that his draft report suggested scrapping these market-based instruments altogether because of concerns related to market liquidity and stability.
“This was also the ECB’s recommendation”, he said.
As some MEPs insist on keeping MBIs, he has included, as a compromise, measures to improve this regime and make it a measure of last resort.
He thus proposed to give a mandate to the European Securities and Markets Authority (ESMA) to examine additional regulatory tools to avoid settlement failures. He also included provisions to reduce the likelihood of market-based instruments being implemented, as well as amendments to limit the scope of MBIs.
On supervision, a majority of MEPs want to see more convergence in supervision and seem to agree with the rapporteur’s proposal to create colleges where the CSD is of substantial importance in at least two Member States.
However, Van Overtveldt said he was “hesitant” about giving ESMA direct supervision over CSDs with substantial importance in five or more Member States.
“These CSDs also generally provide banking services and the division of labour between ESMA and national banking supervisors would be very complicated”, he said.
The rapporteur therefore suggested that Amendment 130, tabled by René Repasi (S&D, German), should be a compromise amendment. According to this amendment, ESMA would have enforcement and supervisory powers over CSDs of substantial importance in at least five or more Member States.
For its part, the Council of the EU already adopted its position in December (see EUROPE 13088/15).
To read the amendments: https://aeur.eu/f/51a (Original version in French by Anne Damiani)