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The draft RTS set out the prudential framework that will apply to both CSDs offering banking-type ancillary services and licensed as a credit institution and those CSDs that are not permitted to offer such services but can designate a credit institution to that effect. The European Banking Authority (EBA) specifies the framework for determining capital requirements for all CSDs along with additional requirements that will only apply to those CSDs offering banking-type ancillary services.
The framework for all CSDs builds on the existing banking framework and is applied in a targeted manner that takes into account the specific risk profile of CSDs and will ensure adequate protection against operational, legal, custody, investment and business risks. In addition, those CSDs providing banking-type of ancillary services will need to comply with the additional capital requirements laid down in the Capital Requirements Regulation (CRR). As a consequence, the EBA considered the possible differences between the CRR and Central Securities Depositories Regulation (CSDR) regimes so as to ensure that stricter rules on prudential supervision apply, as required by the CSDR, without duplicating the existing applicable prescriptions in the CRR.
For CSDs offering banking-type ancillary services and licensed as a credit institution, the EBA also includes in its RTS the methodology for determining how an additional risk-based capital surcharge should be calculated, in order to better reflect the risks resulting from the provision of intraday credit. In addition, for those CSDs, requirements also specify the framework and the tools that CSDs are required to develop in order to properly monitor, measure, manage and disclose credit and liquidity risks.