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Harmonising CSDs and Settlement across the EU

It may have slipped your attention, but the European Commission consultation on CSDs (central securities depositories) and “harmonising certain aspects of securities settlement” will be closing for feedback on 1 March.  If anything is fundamental to the way that securities markets work, it’s definitely settlement, and even more relevant when we can see exchanges that own CSDs merging with exchanges that don’t own CSDs.

Some of the questions in this consultation show that it is really a “bottom-up” review, and not just skimming the surface.   It looks at harmonising settlement periods to T+2 across all EU member states.   It looks at what the difference is between a CSD and a custodian, and what other services CSDs provide in their role as CSDs or just as commercial service providers.

It looks at service issues that can have a significant impact, such as price transparency and the unbundling of services and fees.  It’s not unusual for a CSD to use bundling and/or “tying” – making a customer pay for more than one service just to be able to use the single service that the customer actually wanted in the first place.

And it also looks at access to and interoperability between CSDs, and between CSDs and other market infrastructures.  And at business continuity, disaster recovery, crisis management – making sure that the operational risks that need to be addressed by CSDs include the technology-related ones as well.

If you were already fully aware of this consultation, you can have a quiet half-term holiday next week, like I’m going to do.  If you weren’t aware, and should have been – you’ve got until Tuesday 1 March to send a response to the European Commission.


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