ESMA updates CSDR, benchmark Q&As

The updated Q&As provide answers to questions regarding practical issues on the implementation of the new CSDR regime. The latest batch of CSDR Q&As clarify two aspects of the settlement discipline regime in relation to cash penalties:

• Calculation of cash penalties: the first Q&A confirms that cash penalties amounts should be calculated per settlement currency (and do not need to be converted into euros).
• Cases of non-application of cash penalties: The second Q&A lists situations where cash penalties should not be applied either because an insolvency proceeding has been opened against a failing participant or because settlement cannot be performed for reasons independent from any of the involved participants. This latter category covers: suspensions of ISINs from settlement or from trading, closure of a relevant payment system for settlement and certain technical impossibilities at CSD level.

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The new Q&A provide clarification on provisions of the BMR regarding the scope of application of the Commission Delegated Regulations adopted under the BMR depending on the type of benchmark and in particular:

·         Regulated-data benchmarks;

·         Interest-rate benchmarks; and

·         Commodity benchmarks.