MARKET INFRASTRUCTURE

Clearstream gears up for CSDR implementation

Clearstream will apply for a new operating license this autumn as it readies for the introduction of CSDR.

By Paul Walsh paul.walsh@strategic-i.com July 17, 2017 10:13 AM GMT
Clearstream will apply for new licenses to operate under the Central Securities Depository Regulation (CSDR) this autumn as the German-owned CSD prepares for its implementation.

Under CSDR obligations, European CSDs are required to submit applications to local regulators by the end of September.

Authorisations are expected to be granted from the middle of May 2018.

According to Clearstream, its implementation is the first step to bolster safety and stability across European capital markets.

Clearstream also stated CSD customers will be directly impacted by CSDR through a new settlement discipline regime introducing mandatory buy-ins, cash penalties for settlement failures and internalised settlement reports.

“We are the ‘safe haven’ for our customers’ assets,” said Marc Robert-Nicoud, CEO of Clearstream.

“It is therefore in our primary interest to ensure that our clients have absolute confidence in the safe deposit of the assets they entrust to us.”

Having received approval in 2014, CSDR is designed to harmonise the timing and conduct of settlements across Europe as well as provide a set of common requirements for CSDs operating securities settlement systems.

The regulation is also designed to enhance legal and operational conditions for cross-border settlement via the TARGET2-Securities (T2S) initiative.

Earlier this year, the European Securities and Markets Authority (ESMA) released an updated guide on the implementation of CSDR, offering direction on the introduction of additional national requirements, as well as organisational and record keeping obligations.

Other targeted areas of the guidance included the protection of securities of participants and those of their clients, and the provision of banking-type ancillary services.