Regulators seek to minimise the potentially wide-spread impact of Brexit on Europe’s capital markets.
The move will allow Euroclear UK and Ireland (EUI) to continue to settle Irish-domiciled funds and securities once the Brexit transition period ends on 31 December.
The new chair of ESMA will take up the role in April 2021 once Steven Maijoor steps down.
Panellists at the Network Forum Autumn Meeting echoed fears that plans comply with the rules have been put on hold since the announcement of its delay.
Proposal would see harmonisation of two fund directives with a focus on aligning regulatory reporting.
The proposal came in response to a request from the European Commission to further postpone the Settlement Discipline Regime.
Global Custodian understands advanced discussions are underway among EU regulators to propose a delay, though confirmation of this could still be months away.
The decision from the European Commission means the rules will come into force from 3 September 2020.
Trade associations including AIMA and FIA EPTA have said the short selling restrictions have failed to curb volatility and could pose long-term damage.
The endorsement comes two months after the ESMA stated it would postpone enforcing CSDR's settlement discipline regime following an industry-wide lobby.