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CSDR: publication of delegated regulation on settlement discipline

25/09/2018

On 25 May 2018, the European Commission adopted the text on the settlement discipline (last level 2 text of the CSDR regulation).

On 25 May 2018, the European Commission adopted the text on the settlement discipline (last level 2 text of the CSDR regulation). The Commission endorsed, without major changes, the proposals made by ESMA in early 2016. This text does not remove all the uncertainties raised by the latter. The changes essentially affect the initial structure of the text and allow two points to be closed at this stage:

  • The schedule: the Commission has accepted the principle of the 24 months necessary for the implementation of the obligation which will come into effect as from the end of the objection phase reserved for the European Parliament and Council, suggesting a deadline for implementation around September/October 2020
  • The “buy-in” obligation (one of the pillars of this arrangement) will apply to the counterparties of the transaction and not to the settlement counterparties.

In addition, ESMA has already started drafting Level III (guidelines and Q&A) covering the provisions relating to the settlement discipline.

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