ESMA postpones introduction of CSDR’s settlement discipline regime

The European Securities and Markets Authority (ESMA) has actioned the postponement of the Central Securities and Depositories Regulation (CSDR) settlement discipline regime (SDR) after intense lobbying from industry bodies.

The CSDR regulation is announced to come into effect on 1stFebruary 2021. This gives industry participants an extra six months to prepare and make necessary IT system changes, to develop and update the relevant ISO messages, and to put in place the legal arrangements.

The SDR letter was co-authored by industry groups consisting of the Association for Financial Markets in Europe (AFME), the Investment Association (IA), the International Capital Market Association (ICMA), the Alternative Investment Management Association (AIMA), and the International Securities Lending Association (ISLA), among others.

The letter covers rules to drive greater settlement efficiency, the consensus among both buy- and sell-side firms is made mandate in the regime. The SDR is the CSDR component that aims to improve settlement efficiency in Europe and its scope is wide spread.