ESMA publishes final guidelines on settlement fails reporting under CSDR

On 24 September 2021, ESMA published its final guidelines on settlement fails reporting under Article 7 of the Central Securities Depositories Regulation (CSDR).

According to Article 7(1) of the CSDR, for each securities settlement system it operates, a central securities depository must establish a system that monitors settlement fails of transactions in financial instruments. It must provide regular reports to the competent authority and relevant authorities, as to the number and details of settlement fails and any other relevant information, including the measures envisaged by CSDs and their participants to improve settlement efficiency. The competent authorities must share any relevant information on settlement fails with ESMA.

The RTS on settlement discipline specifies the details of the reports on settlement fails referred to in Article 7(1) of CSDR. The objective of these guidelines is to clarify the scope of the data to be reported by CSDs, the representation and valuation of financial instruments, the types of transactions and operations that should not be included, and how to report settlement fails based on the reason for the settlement fails.

The guidelines will apply from the date of entry into force of the RTS.