Central Securities Depository Regulation (CSDR)
The Central Securities Depositories Regulation (CSDR) aims to increase the safety and efficiency of securities settlement and settlement infrastructures in the European Union (EU). The regulation does this by harmonising the timing and conduct of securities settlement in Europe and the rules governing Central Securities Depositories (CSDs) including capital requirements.In addition, the CSDR also covers a number of other topics such as the dematerialisation of securities, the settlement period for securities trades and the introduction of a new settlement discipline.
CSD requirements are introduced step-wise. Obligations, except those related to the settlement discipline have been in force since 30 March 2017. The settlement discipline will be in force from September 2020.
1Implementation / enforcement 10/2010 - 03/2012
2Discussion / consultation 03/2012 - 08/2014
3Implementation / enforcement 08/2014 - 09/2020
4In effect 09/2020 -
To increase the safety and efficiency of securities settlement the regulation introduces rules related to the dematerialisation of securities, the setllement period of securities and a new settlement disipline.
Dematerialisation is the obligation for securities to be recorded electronically from the moment they are traded. The key objective of dematerialisation is to ensure a quicker settlement.
The maximum settlement period is set by the CSDR at a maximum of two days after the trading day (T+2) significantly reducing risks.
The new settlement discipline sets strict measures to address settlement fails while allowing for a certain degree of flexibility tailored for the needs of SMEs and specific transactions such as repurchase agreements.