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CySEC Highlights EU Regulation on Securities Settlement Improvement
11/10/2017
CySEC Highlights EU Regulation on Securities Settlement Improvement

CySEC Informs about EU Regulation on Securities Settlement Improvement. Moreover, the Cypriot regulator highlighted the latest developments on the regulatory norms at EU level in regards to the securities settlement and central securities depositories. What do you need to know?

11 October, AtoZForex The Cyprus Securities and Exchange Commission (CySEC) has issued a circular for all the regulated entities on the island. With this circular, the financial regulator of Cyprus wants to inform the firms with registration about the Regulations on improving securities settlement on the EU and on central securities depositories.

CySEC Informs about EU Regulation on Securities Settlement Improvement

Moreover, the latest CySEC circular talks about the latest developments on the regulatory norms at EU level in regards to the securities settlement and central securities depositories. As a matter of fact, the official document of CySEC states that this document lays down the requirements for the settlement of financial instruments in the EU.

It also talks about rules on the organization and conduct of central securities depositories (CSDs) to market safe, smooth and efficient settlement.

The regulator highlights that CSDR applies to the settlement of all financial instruments and activities of CSDs unless it stated otherwise in CSDR. CySEC further outlines what CSDR provides:

  • Shorter settlement periods;
  • Settlement discipline measures (mandatory cash penalties and ‘buy-ins’ for settlement fails);
  • An obligation regarding dematerialization for most securities;
  • Strict prudential and conduct of business rules for CSDs;
  • Strict access rights to CSD services; and
  • Increased prudential and supervisory requirements for CSDs and other institutions providing banking services ancillary to securities settlement.

CSDR Related EU Regulations

Furthermore, the Cypriot watchdog states that ESMA has published guidelines in regards to this topic. The aim was to ensure common, uniform and consistent application of CSDR in the European Union.

After the publication of CSDR, the European Commission has published following Regulations (among others):

i. Regulation in regards to the parameters for the calculation of cash penalties for settlement fails and the operations of CSDs in host Member States;

ii. Regulation with regard to regulatory technical standards on certain prudential requirements for central securities depositories. This is also valid for designated credit institutions offering banking-type ancillary services;

iii. Commission Delegated Regulation with regard to regulatory technical standards further specifying the content of the reporting on internalized settlements.

iv. Regulation with regard to regulatory technical standards on authorization, supervisory and operational requirements for central securities depositories.

v. Commission Delegated Regulation (EU) 2017/393 with regard to the templates and procedures for the reporting and transmission of information on internalized settlements.

You can find the official CySEC circular here.

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