The European Securities and Markets Authority has launched a consultation to assess industry reaction to potential changes to cash penalty procedures under the Central Securities Depositories Regulation (CSDR).
These proposed changes would allow central securities depositories (CSDs) to collect and distribute all forms of penalties for failed settlement under the CSDR settlement discipline regime, including penalties for centrally cleared transactions.
Under the current regime, which was enacted in February 2022, cash penalties applied to settlement fails for centrally cleared transactions are collected and distributed by central counterparties (CCPs).
Respondents have been asked to submit their input to the consultation process before 9 September 2022. ESMA expects to publish a final report analysing the consultation findings, along with revised regulatory technical standards (RTS), before the end of the year.
