We are the competent authority for issues related to trading venues and investment firms, including requirements to comply with the securities settlement discipline and settlement cycles.
A central securities depository (CSD) is an institution that holds financial instruments, including equities, bonds, money market instruments and mutual funds.
It allows ownership of those instruments to be transferred in electronic form through updating electronic records which are often known as ‘book-entry records’.
The UK CSD is Euroclear UK and Ireland (EUI). The Bank of England is the competent authority for the authorisation, supervision and policy for EUI.
Central Securities Depositories Regulation (CSDR)
CSDR is EU legislation that aims to harmonise the authorisation and supervision of EU CSDs and certain settlement aspects, such as dematerialisation of financial instruments.
This means that the securities will be held in electronic form, much like cash is held in a bank account.
CSDR introduces a mandatory buying-in and cash penalty securities settlement discipline to tackle failed settlement transactions.
It also reduced the standard securities settlement cycle to T+2 (with ‘T’ meaning the date of trade and the settlement of this trade being two days after the trade). This has been effective in the UK since 6 October 2014.
What firms should do
CSDR came into force on 17 September 2014, although many of the requirements will not apply until technical standards are adopted and, in some cases, until the CSDs have been re-authorised under the new regime.
Firms should consider the likely impacts of the proposed regulation and decide what they will need to do to comply with the new standards when they come into force.
For further information see: