On 16 March 2022, the European Commission published a draft Regulation that amends the Central Securities Depositories Regulation (CSDR). In addition, the Commission has published FAQs, an impact assessment and a summary impact assessment on its proposal.

The draft Regulation is intended to improve:

  • The passport regime by, for example, shortening the period to transmit the request to the host supervisor, removing the possibility for host supervisors to refuse the passport and mandating that only a notification from the home supervisors to the host supervisors is required.
  • Co-operation between supervisory authorities. The Commission is proposing to establish colleges where a central securities depository (CSD) is passported in other Member States and where it is part of a corporate group comprising two or more CSDs authorised in at least two Member States.
  • Banking type ancillary services. The Commission is proposing to amend the conditions under which a CSD may provide banking-type ancillary services. In particular it proposes to amend the threshold under which CSDs can provide these services and also it is broadening the range of providers that CSDs can use to offer different settlement services.
  • Settlement discipline. The Commission is proposing to improve the mandatory buy-in regime, refine its scope, as well as make it more proportionate and effective. Also, a pass-on mechanism will be introduced where only the original failing participant in the chain will be made the addressee of the claim.
  • The oversight of third-country CSDs. An end-date to the current grandfathering clause will be introduced and third-country CSDs will have to notify the European Securities and Markets Authority when they are providing core services in the EU.

The proposal will now be submitted to the co-legislators. The changes will enter into force once the European Parliament and the Council have approved them.