Central Securities Depositories review

EESC opinion: Central Securities Depositories review

Key points


  • finds the solutions proposed by the Commission to the five main issues identified during the Central Securities Depositories (CSDs) Regulation review process to be, in general, sufficient and effective;
  • welcomes the Commission's initiatives to replace existing passporting requirements with a notification, as well as the proposal on supervisory colleges;
  • sees opportunities for the provision of banking-type ancillary services in solutions based on settlement in central bank money. Greater use of TARGET2-Securities (T2S) settlement platform would reduce risks;
  • recommends to include in the Commission proposal the provisions recognising T2S's central role for the European securities settlement infrastructure;
  • notes that the "two-step" approach to the imposition of mandatory buy-ins should not be considered until underlying reasons for settlement failures are examined and clarity is obtained on the effectiveness of other measures;
  • recommends actions for shortening securities settlement "command chains" and suggests to examine a widespread use of the "pre-matching" technique, to reduce settlement failures;
  • warns that a Pilot Regime for Distributed Ledger Technology (DLT) must not set a precedent for lowering standards of market conduct and investor protection. To reduce counterparty risk, CSDs should play a key role in managing the DLT networks;
  • suggests that CSDs, their issuers, and their participants are required to set up a mechanism to exchange and share data relevant to the implementation of European sanctions.