On 31 March 2021, the European Securities and Markets Authority updated its Q&As on the Central Securities Depositories Regulation (CSDR).

The latest Q&As on the CSDR contain answers that relate to:

  • The provision of CSD services in other Member States: (i) the first Q&A further clarifies that Article 23 of CSDR applies to all types of financial instruments, as defined under MIFID II, whether or not admitted to trading, or traded, on trading venues; (ii) the second Q&A clarifies that, for the purpose of Article 23(2) of CSDR, the “law under which the securities are constituted” should by default be the standard law of the issuance of the securities and/or, if determined by the issuer, the national law of the issuer.
  • The exemption from the application of cash penalties and the buy-in requirements for settlement fails relating to transactions involving central counterparties (CCPs): the third Q&A clarifies that only settlement fails relating to transactions for which a CCP interposes itself between the counterparties (i.e. transactions cleared by the concerned CCP) should be captured by the exemption under Article 7(11) of CSDR.