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The European Association of Clearing Houses (EACH) has urged the European Commission (EC) to agree with the European Securities and Markets Authority (ESMA) to further delay the implementation of CSDR SDR beyond February 2022.
EACH’s request for a further delay was outlined in its response to the EC Inception Impact Assessment on the Central Securities Depositories Regulation’s (CSDR) settlement discipline regime (SDR).
The Inception Impact Assessment aims to assess how the EU rules on central securities depositories (CSDs) are working, focusing on how CSDs are able to operate in different countries across the EU, and how requests to use their services are handled.
The initiative also aims to find out whether there are other substantive barriers to competition in this sector that need to be addressed. The EC opened this up for feedback on 8 March and will keep it open until 5 April.
As indicated in its feedback to the CSDR consultation response in February, EACH strongly believes that the CSDR Review is necessary due to the existence of “inaccurate, redundant and unnecessarily burdensome provisions” in SDR.
According to EACH, a number of the provisions are simply not implementable because of their technical inaccuracy and some would also increase operational risk within the EU CSDR SDR.
The association is also pushing for the EC to review the current CSDR SDR in line with stakeholder comments to ensure that SDR is also implemented as one legislation.
EACH suggests that any other alternative to its requests, such as clarification through Q&As, would not address the concerns expressed and would fail to ensure a more efficient and robust CSDR SDR.
Meanwhile, EACH is not the only industry participant concerned about the February date as recently demonstrated in a letter to EU regulators.
The letter, co-signed by 14 trade associations, requested that EU rule makers finalise the “essential” revisions to the buy-in rules before setting out a timeline for implementation.
More recently, during a panel discussion at the DTCC CSDR Series 2021, BNY Mellon’s Martin Smith said: “I predict there will be lots of confusion between all parties in February 2022. We will have to work with clients and custodians to get over that initial period. I think it will be a challenging period especially if the issues on buy ins are not resolved.”
