The European Central Bank's opinion on the Commission’s proposal for a Regulation amending the Central Securities Depositories Regulation (‘CSDR’) has now been published in the Official Journal of the EU. The ECB overall welcomes the proposal but makes several suggestions, including the following:

Settlement discipline regime:

  • The review of the settlement discipline regime should take as its starting point the aim of sanctioning only those settlement fails that result in adverse financial effects for the counterparty of the failing party.

  • ECB welcomes the proposed exclusions from the settlement discipline regime of both settlement fails caused by factors not attributable to the participants to the transaction, and settlement fails occurring in the context of transactions that do not involve ‘two trading parties’. However, in relation to the latter, it suggests clarifying by means of delegated acts, the scope of settlement fails this would cover (understanding it to cover free-of-payment securities transfers to securities accounts at CSDs in the context of the (de)mobilisation of collateral, whether those transfers are between private parties or between members of the ESCB and their counterparties). It also notes CSDs might not at present be equipped to identify settlement instructions that are to be excluded from the scope of the settlement discipline regime under the proposed regulation and suggests this is addressed through definitions in the delegated acts that enable the envisaged exclusions to be concretely identified, assisting automation.

  • States that it would be preferable to discard the possibility of mandatory buy-ins altogether, but that if the requirements are to come into force:

    • sufficient time should be allowed for market participants to implement them;

    • all securities financing transactions should be excluded from scope; and

    • flexibility should be given to market participants to whom the buy-in would apply in a given case (e.g., market participants could be required to contractually agree on such details between themselves, and / or an option could be for the non-failing party to decide whether or not the buy-in process is to be triggered).

Establishment of colleges:

  • Widening the scope of the passporting colleges’ mandate to cover other types of cross-border activities, including settlement in relevant foreign currencies and the operation of interoperable links.

  • Renaming the passporting colleges as cross-border activity colleges.

Banking-type ancillary services:

  • Limiting the scope of services to be offered by banking CSDs to user CSDs to services which are provided for the purposes of settlement in foreign currencies. This is prevent the banking CSDs from engaging in broad range of activities and taking excessive risks

  • Making a requirement for banking CSDs to develop a framework that elaborates on how risks stemming from the activity of the user CSDs can be contained.

  • Making a requirement for CSDs to have in place clear rules and procedures addressing potential conflicts of interest and mitigating the risk of discriminatory treatment towards any user CSDs and their participants.


  • Providing clarification to explain that a CSD has the possibility to determine additional events that constitute a default by a CSD participant, where the default management rules and procedures referred to in the CSDR are not sufficient to address material events that may occur in a system.

The opinion published on 26 September 2022 is available here.

More information

Our note on the Commission’s original reform proposals from March 2022 is available here.

Our earlier blog post on the ECB’s opinion when it was first published on 1 August 2022 is available here.