The European Association of CCP Clearing Houses (EACH) is today publishing its response to the European Commission ‘Targeted consultation on the review of the Regulation on improving securities settlement in the European Union and on central securities depositories’ CCPs are directly concerned by CSD Regulation (CSDR) mainly through its settlement discipline regime.
We welcome the opportunity provided by the European Commission as this consultation represents an excellent occasion to address some of the issues that can ensure this piece of legislation, and from the EACH point of view its settlement discipline regime, is as robust and efficient as possible. Our suggestions to this end include:
- The reduction of operational risk, complexity and duplication and the increase in efficiency through the application of a single regime for the collection and distribution of penalties under CSDR SDR Art. 17, rather than two regimes under CSDR Art. 17 and CSDR Art. 19.
- A clarification that CCPs can continue to provide their crucial function of netting to the full extent possible, for the benefit of market participants.
- An adjustment of CSDR to ensure the buy-in regime can be implemented by reflecting the real functioning of CCPs, where there is no such thing as a ‘receiving clearing member’.
- A revision of the date of entry into force of CSDR’s settlement discipline regime, giving market infrastructures and other market participants sufficient time to implement and avoiding unnecessary duplicative implementation costs.