On 26 August the European Securities and Markets Authority (ESMA) published its final report relating to the postponement of the effective date of new regulatory technical standards (RTS) on settlement discipline pursuant to Central Securities Depositories Regulation (CSDR).

The RTS was initially planned to come into force on 13 September 2020, but in May 2020 it was approved by the European Commission that this would be delayed until 1 February 2020. This was based on feedback from market participants that the original date would be premature given that other significant regulatory changes were to be implemented at the same time.

The new RTS will require significant IT system changes, market testing and adjustments to legal arrangements. Therefore, it has since been acknowledged by ESMA that the revised date has now become unachievable in light of the extensive global impact of the Covid-19 pandemic. ESMA has thus proposed a further one year postponement of the effective date of the RTS, to 1 February 2022.

As a next step, this further delay to implementation will be proposed to the European Commission for their review and endorsement. Once the amendment to the date of enforcement of the RTS on settlement discipline has been adopted by the European Commission, there will be a period of non-objection from the European Parliament and Council before the change is published in the Official Journal.