The European Securities and Markets Authority (ESMA) published technical standards on different aspects of the Central Securities Depositories Regulation (CSDR) Refit.
The rules relate to the information to be provided by European CSDs to their national competent authorities (NCAs) for the review and evaluation process, to the criteria for assessing the importance of European CSDs in a host Member State and to the information to be notified by third-country CSDs.
Jesús Benito, head of Domestic Custody and Trade Repository Operations at SIX, said in emailed commentary: “These CSDR Refit tweaks may seem incremental, but they mark a really important step toward enhancing the resilience and transparency of Europe’s post-trade ecosystem.
“By standardizing reporting, strengthening oversight, and streamlining processes, these changes will not only improve operational efficiency for CSDs but also bring greater stability and confidence to market participants. Local regulators will certainly play a crucial role in ensuring these reforms are implemented effectively, providing a clearer, more consistent view of risk across the market.
“We welcome all efforts to create a more harmonized regulatory framework, with a prominent role for local national competent authorities, that supports safer and more efficient settlement.”
The technical standards are set out in three separate final reports:
– The review and evaluation process of EU CSDs, where ESMA suggest a harmonisation of the information to be shared by CSDs for feeding the overall assessment of the competent authorities, plus a one-year implementing period for the new reporting items that will require an adaptation of the IT processes of CSDs.
– The criteria under which the activities of an EU CSD in a host Member State could be considered of substantial importance for the functioning of the securities markets and the protection of investors. It includes details about the data collection process for the indicators needed to assess the substantial importance of European CSDs in a host Member State. This will be the basis to determine the CSDs for which colleges of supervisors have to be established.
– The notifications from third country CSDs, where ESMA is proposing to streamline the information to be notified, aiming for an accurate understanding of the provision of notary, central maintenance and settlement services in the Union.
The CSDR Refit aims to fine-tune and clarify the CSDR framework. All the Final Reports published today considered the input from the relevant stakeholders and the cross-cutting effort of regulatory burden reduction when possible.
Next Steps
The three final reports with the draft technical standards have been submitted to the European Commission (EC) for adoption.