ESMA consults on potential changes to the CSDR penalty mechanism
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has today published a Consultation Paper on Technical Advice to the European Commission on the CSDR penalty mechanism. The consultation runs until 29 February 2024.
The aim of the consultation is to collect evidence and data from stakeholders on the effectiveness of the current penalty mechanism in discouraging settlement fails and incentivising their rapid resolution. In addition, it seeks feedback on ESMA’s preliminary proposals regarding:
- alternative parameters, when the official interest rate for overnight credit charged by the central bank issuing the settlement currency, is not available;
- the treatment of historical reference data for the calculation of late matching fail penalties; and
- alternative methods for calculating cash penalties, including progressive penalty rates.
Next steps
The public consultation is open until 29 February 2024. The feedback it receives will feed into ESMA’s Technical Advice, which is expected to be sent to the European Commission by the end of September 2024.
Further information:
Sarah Edwards
Senior Communications Officer
@ press@esma.europa.eu