The Central Securities Depositories Regulation (CSDR) is the EU regulation relating to securities settlement and central securities depositaries (CSDs). It applies to CSDs that are based in the EU and their participants. The CSDR entered into force in September 2014 and many of its requirements were staggered. It standardises the requirements for the settlement of financial instruments and the rules on the organisation and conduct of CSDs. The regulation introduced shorter settlement periods, settlement discipline measures, organisational, conduct of business and prudential requirements for CSDs and provided for a passporting regime allowing authorised CSDs to provide their services across the EU.

In March 2022, the Commission issued a legislative proposal amending the CSDR and the Short Selling Regulation as part of the 2020 Capital Markets Union Action Plan. The aim of the proposal was to make selected amendments to the CSDR in order to make securities settlement in the EU more efficient and improved the attractiveness of the EU’s capital markets. The proposal is known as the CSDR REFIT. 

The CSDR REFIT focused on amending the CSDR in five key areas: settlement discipline (including the pre-conditions for applying mandatory buy-ins), the passporting regime, banking-type ancillary services, oversight of third country CSDs and cooperation between supervisory authorities. It also amended the Short Selling Regulation by re-introducing a provision about buy-in procedures.

In our latest briefing, we summarise the key changes introduced by the CSDR REFIT and also touch on the position in the UK.