The European Central Securities Depositories Regulation (CSDR) is one of the key regulations adopted in the aftermath of the 2008 financial crisis. The CSDR will ensure that settlement is carried out in a safer and more efficient manner in Europe.

Objective

A central securities depository (CSD) is a post-trade infrastructure which provides a central point for depositing financial instruments, e.g. shares and bonds. CSDs enable securities transactions to be processed and settled by book entry, provide custodial services (e.g. the administration of corporate actions and redemptions) and play an active role in ensuring the integrity of securities issues.

CSDs are already highly regulated entities on the national level. However, these rules were not harmonised at European level, nor were there rules for the passporting and cross-border dimension of its provision of services. Therefore, the European Commission prepared a regulatory framework for CSDs – the CSDR. The CSRD also includes a section applicable to the entire market, relating to the measures to avoid settlement fails in the market, also known as the Settlement Discipline Regime (SDR).

Deutsche Börse Group supports the harmonising of securities settlement and prudential rules for CSDs across Europe, as well as the SDR, in order to enhance market safety and create a level playing field.

Timeline

The CSD regulation entered into force on 17 September 2014 and in its text it is foreseen that a first limited review would be triggered after 5 years. The European Commission has started work in this regard and published a consultation on the topic in early December 2020.