EBF supports AFME proposal for temporary changes to the CSDR penalties month-end process

11 March 2022

EBF members feel that this solution would facilitate the proper receipt of full and correct details of all individual penalty items by participants, while giving them sufficient time to reconcile Monthly Net Amounts with the individual penalty items captured on the daily reports.

The EBF supports the proposal made by the Association for Financial Markets in Europe (AFME) at the invitation of the Advisory Group on Market Infrastructures for Securities And Collateral (Ami-SeCo) of the European Central Bank (ECB) to set out temporary changes to the month-end processing timetable for CSDR late settlement penalties in order to mitigate and manage problems and delays registered by market participants in the context of the live phase started on February 1st, 2022.

Proposed timetable for the month-end process for CSDR penalties

Process Current Timetable Proposed Extension
Last Date for participants to raise appeals to CSD 14th March 28th March
Last Date for CSD to report adjustments to participants 17th March 30th March
Reporting of Monthly Net Amount 18th March 31st March
Collection/Redistribution of Monthly Net Amount 23rd March 13th April

AFME proposes an extension of:

  1. An additional 9 business days to the window for further adjustments to be made by CSDs in response to issues raised by participants, before the Monthly Net Amount (MNA) is reported.
  2. An additional 6 business days to the window between reporting of the MNA and collection/redistribution of the MNA.

EBF members feel that this solution would facilitate the proper receipt of full and correct details of all individual penalty items by participants, while giving them sufficient time to reconcile Monthly Net Amounts with the individual penalty items captured on the daily reports.

EBF members trust that this proposal may be rapidly considered by all relevant stakeholders, including, in particular, market infrastructures and securities regulators, and that market participants may receive further clarity as soon as possible concerning the appropriate way forward.

Finally, the EBF remains committed to supporting  the full implementation of CSDR settlement discipline rules for the benefit of better integrated, efficient and transparent capital markets in Europe.


EBF


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