The Central Securities Depositories Regulation (CSDR) is part of the reformation of the European financial markets which, alongside EMIR, MiFID II and MiFIR, seeks to create a single market in the wake of the 2008 financial crisis. CSDR aims to improve the efficiency of securities settlement and changes the post trade landscape through amending the Settlement Finality Directive 1998. It is also likely to increase competition between CSDs.

Some key aims of CSDR are to:

  1. Harmonise the timing and conduct of securities settlement across the European Economic Area.
  2. Provide a common framework for the authorisation, supervision and regulation of CSDs.
  3. Improve safety of settlement, especially cross-border transactions.
  4. Establish interoperability between European CSDs and other European CSDs, CCPs and trading venues irrespective of location.

CSDR works alongside Target 2 Securities (T2S). Devised and operated by the ECB, T2S is a new pan-European securities settlement engine intended to provide centralized delivery-versus-payment (DVP) settlement in central bank funds across all EU securities markets in real time. T2S and CSDR share consistent objectives, i.e. ‘a common technical platform to support CSDs in providing borderless securities settlement services in Europe’. In operation, together CSDR and T2S aim to make post trade more standardised and cheaper across Europe.

CSDR/T2S Current Status:

In July 2019, the first internalised settlement reports were delivered to the relevant National Competent Authorities (NCAs) institutions considered to operate as settlement internalisers.

The Level 2 technical standards are complete and in force, except for those regarding the implementation of settlement discipline rules which enter into force in September 2020.

The final wave of T2S migration successfully completed in September 2017 with CSDs from Estonia (Eesti Väärtpaberikeskus), Lithuania (Lietuvos centrinis vertybinių popierių depozitoriumas) and Latvia (LCD), Finland (Euroclear Finland) and Spain (Iberclear). T2S became multi-currency in October 2018 with the addition of the Danish kroner.

CSDR and T2S Timeline

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January 2025
1 January
Transferable securities to be transferred into book-entry form.
January 2023
1 January
Certified securities to be transferred into book-entry form for all new securities issued.
September 2020
13 September
The RTS for the implementation of Settlement Discipline rules enter into force; two years after publication in the Official Journal of the EU.
July 2019
12 July
First internalised settlement report due from institutions considered to operate as settlement internalisers to the relevant National Competent Authorities (NCAs). The report covers the period from April 2019 to June 2019.
March 2019
10 March
RTS and ITS on Internalised Settlement are published in the Official Journal of the EU, and enter into force 20 days later.
November 2018
30 November
Target Instant Payment Settlement (TIPS) service is launched as an extension to T2S. TIPS allows for banks to settle instant payments in central bank money.
October 2018
29 October
Denmark (Danmarks Nationalbank) connects to T2S, making the Danish kroner the first currency outside the Euro to join T2S.
September 2018
13 September
Technical Standards for settlement-discipline related obligations are published in Official Journal of the EU. They are due to enter into force on 13 September 2020.
May 2018
25 May
The European Commission adopts ESMA’s proposed regulatory technical standards regarding settlement discipline.
March 2018
28th March
ESMA publishes its Final Report and Guidelines on internalised settlement reporting.
September 2017
Deadline for CSDs and ICSDs to apply for reauthorisation to respective national competent authorities (NCAs).
18th September
The final wave of T2S migration is completed with CSDs from Estonia (Eesti Väärtpaberikeskus), Lithuania (Lietuvos centrinis vertybinių popierių depozitoriumas) and Latvia (LCD), Finland (Euroclear Finland) and Spain (Iberclear).
July 2017
10th July
ESMA publishes a consultation paper on draft guidelines on internalised settlement reporting.
June 2017
1st June
ESMA publishes two sets of guidelines for determining the indicators of the substantial importance of CSDs and most relevant currencies.
March 2017
30th March
Technical standards for CSD requirements and internalised settlement enter into force, with the exception of settlement discipline-related obligations.
10th March
Technical standards for CSD requirements as adopted by the European Commission in November are published in Official Journal of the EU (with the exception of settlement discipline-related obligations). They enter into force 20 days later.
February 2017
6th February
Fourth wave of T2S migration is completed with CSDs from Austria (Oesterreichische Kontrollbank), Germany (Clearstream), Hungary (KELER), Luxembourg (LuxCSD), Slovakia (CDCP) and Slovenia (KDD).
November 2016
11th November
The European Commission adopts ESMA’s draft regulatory technical standards for CSD requirements. ESMA’s Technical Advice on penalties for settlement fails is adopted as a Commission Delegated Act.
September 2016
12th September
Third wave of T2S migration is completed with CSDs from Belgium (Euroclear), France (Euroclear), Netherlands (Euroclear), Luxembourg (VP Lux) and Denmark (VP Securities).
June 2016
7th June
European Parliament joins the Council of the EU to adopt the Commission’s proposal to delay the implementation of MiFID II to January 2018. This directly delays the application of CSDR settlement rules to Q2 2018.
May 2016
31st May
ESMA opens a consultation on guidelines on participant default rules and procedures under CSDR. The consultation closes on 30th June.
March 2016
29th March
Second wave of T2S migration is completed with CSDs from Belgium (NBB-SSS) and Portugal (Interbolsa).
February 2016
1st February
ESMA delivers its final report including draft RTS on settlement discipline to the European Commission for review.
September 2015
28th September
ESMA submits draft regulatory and implementing technical standards, technical advice and a final report on CSD requirements to the European Commission. This was originally due by 18th June, but delayed by a letter to the European Commission from ESMA.
1st September
Italy’s CSD (Monte Titoli) goes live on T2S.
August 2015
12th August
Firms now have to also report valuations on their positions and collateral therefore adding more burden to the process.
5th August
ESMA delivers Technical Advice on failed settlement penalties and other issues to the European Commission as mandated on 23rd July 2014.
June 2015
Italy’s CSD (Monte Titoli) delays participation in T2S from the first wave in June until August due to technical reasons and poor testing results.

22nd June
T2S goes live and the first wave of migration is completed successfully with CSDs from Greece (Bank of Greece’s depository for government bonds, BOGS), Malta (Malta Stock Exchange), Romania (Depozitarul Central) and Switzerland (SIX-SIS).
18th June
ESMA sends the European Commission a letter to delay the submission of draft regulatory and implementing technical standards and technical advice to them till September.
May 2015
6th May
ECB announces that the launch of the T2S platform and first wave of the rollout is to be delayed due to technical issues.
March 2015
24th March
ESMA’s Chair presents ESMA’s work on delegated acts and implementing measures for MiFID II and CSDR at an ECON meeting.
February 2015
19th February
ESMA’s second public consultation made of 3 parts closes.
January 2015
13th January
ESMA holds an open hearing regarding the second consultation that opened on 18th December before it closes on 19th February 2015.
1st January
T2S launches with a go-live date of June 2015.

CSDR applies to T+2 securities settlement and the cycle begins across Europe (securities must settle within 2 business days after the trading date).

Bosnia & Herzegovina migrates successfully to the T+2 settlement system.

December 2014
18th December

Following the Discussion paper published on 20th March 2014, ESMA launched its second consultation on proposed technical standards made of 3 parts on 18th December.

  1. Draft technical standards on settlement discipline, CSD requirements and internalised settlement. E.g. organisational and prudential requirements for CSDs.
  2. Draft technical advice on penalties for settlement fails and on the substantial importance of a CSD. E.g. identifying CSDs of substantial importance for the functioning of the securities markets.
  3. Draft guidelines on the access to CCPs or trading venues by CSDs. E.g. covers risk to be taken into account by a CCP or trading venue when carrying out a comprehensive risk assessment following a request for access by a CSD.

The consultation closes on 19th February 2015.

October 2014
6th October
28 EEA markets migrate successfully to the new T+2 settlement cycle, with this being the first trading date on T+2. These markets are: Austria, Belgium, Croatia, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Spain, Sweden, Switzerland and the UK. Germany (exchange only), Bulgaria and Slovenia all already use T+2.
September 2014
17th September
CDSR enters into force. ESMA has 9 months to draft the technical standards required.
August 2014
28th August
CSDR is published in the Official Journal of the EU, entering into force on 17th September. Once CSDR enters into force, ESMA has 9 months to draft around 30 required technical standards (June 2015).
July 2014
23rd July
The CSDR text is formally approved by Council of the EU and adopted.
April 2014
CSDR provisional text is formally adopted by the European Parliament on first reading on 15th April. European Parliament publishes provisional text on 17th April.
March 2014
20th March
ESMA opens public consultation on draft technical standards; closes May 22nd.
February 2014
26th February
Council of EU’s Permanent Representatives Committee confirms agreement with the European Parliament regarding the compromise text.
December 2013
18th December
A final compromise text is agreed.
September 2013
23rd September
Presidency of the Council of the EU issues a general approach/compromise text regarding the new rules for CSDs. The General Approach was the responsibility of the Committee of Permanent Representatives (Part II) which agreed the position on behalf of the Council of the EU.
February 2013
4th February
The European Parliament’s ECON Committee adopts the report.
March 2012
7th March
European Commission adopts a proposal for regulation.
January 2011
13th January
Public consultation opens on the design of the common regulatory structure. The consultation closes on 1st March 2011.

Sourced from European Parliament and European websites, financial and national newspapers and market practitioners.

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