The European Commission has published frequently asked questions (FAQs) concerning the Regulation on improving securities settlement and regulating central securities depositories (the CSD Regulation).
The FAQs cover three particular topics concerning the CSD Regulation:
- the timing of implementation;
- the scope of the requirements; and
- the position of third country central securities depositories (CSDs).
In relation to third country CSDs the FAQs answer the following questions:
- when is a third country CSD required to be recognised under the CSD Regulation? The FAQs state that article 25(1) of the CSD Regulation provides that third country CSDs may provide their services in the EU, including through setting up branches on the territory of the EU. Article 25(2) requires a third country CSD to apply for recognition under the CSD Regulation in two specific cases: (i) where it intends to provide certain core CSD services (issuance and central maintenance services related to financial instruments governed by the law of a Member State); or (ii) where it intends to provide its services in the EU through a branch set up in a Member State. Any services other than those provided above are not subject to recognition by the European Securities and Markets Authority under article 25 of the CSD Regulation; and
- at which moment does a third country CSD need to apply for recognition under the CSD Regulation? The FAQs state that where a third country CSD provides CSD services in a Member State that require recognition under the CSD Regulation, it must apply for recognition under the CSD Regulation within six months after the entry into force of the relevant technical standards or the Commission equivalence decision. During this transitional period, third country CSDs providing CSD services that require recognition under the CSD Regulation remain subject to existing national regimes until they have been recognised under the CSD Regulation.
View CSDR: Frequently asked questions, 6 October 2014