ECSDA warns on MiFID II overlap
23 January 2012 Brussels
Image: Shutterstock
The European Central Securities Depositories Association (ECSDA) has said that CSD safekeeping services should not fall under MiFID II requirements. Instead, the services should be regulated together with other core and ancillary services of CSDs under the upcoming CSD regulation.
ECSDA noted that the proposal to include “safekeeping and administration of financial instruments” in the list of investment services appears unjustified because safekeeping activities carried out by entities holding securities accounts for their clients, whether custodian banks or CSDs, are already regulated and custodian banks are already subject to authorisation either as investment firms and as credit institutions under existing EU legislation.
Meanwhile, CSDs are soon to be regulated under the EU regulation on CSDs, which will cover both their core and ancillary services.
"Overlapping regulations should thus be avoided, not only because duplication could lead to inconsistencies in implementation, but also because the proposed reclassification of the safekeeping and administration of financial instruments services as investment services would not lead to a stricter authorisation and supervision regime," ESCDA said.
ECSDA noted that the proposal to include “safekeeping and administration of financial instruments” in the list of investment services appears unjustified because safekeeping activities carried out by entities holding securities accounts for their clients, whether custodian banks or CSDs, are already regulated and custodian banks are already subject to authorisation either as investment firms and as credit institutions under existing EU legislation.
Meanwhile, CSDs are soon to be regulated under the EU regulation on CSDs, which will cover both their core and ancillary services.
"Overlapping regulations should thus be avoided, not only because duplication could lead to inconsistencies in implementation, but also because the proposed reclassification of the safekeeping and administration of financial instruments services as investment services would not lead to a stricter authorisation and supervision regime," ESCDA said.
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