November 12, 2018

ESMA updated questions and answers (Q&A) documents on the implementation of the Central Securities Depository (CSD) Regulation and Market Abuse Regulation (MAR).

The updated Q&As on CSD Regulation provide answers to questions regarding practical issues on the implementation of the new CSD Regulation regime. The latest batch of CSD Regulation Q&As covers the following topics:

  • Provision of services in another Member State: The updated Q&A document confirms that the program of operations to be provided by the CSD should cover both the core and ancillary services it intends to provide in the host member state. Where relevant, the CSD should provide an assessment of the measures it intends to take to allow its users to comply with the applicable law at least for each type of financial instruments for which it intends to provide the services.
  • Settlement Discipline—the new Q&As relate to the calculation of cash penalties as follows:
    • The first Q&A clarifies that the cash rate should be applied if the reason for the settlement fail is applicable to the leg of the transaction which delivers the cash, while the securities rate should be applied in case the reason for the fail is applicable to the leg of the transaction which delivers the securities
    • The second Q&A confirms that cash penalties should be applied in the case of settlement fails where the instructions are put on hold by the receiving participant
    • The final Q&A clarifies that the, more lenient penalty rates for SME growth market instruments should only apply if the particular trade has actually taken place on an SME growth market

MAR is intended to guarantee the integrity of European financial markets and increase investor confidence. Any unlawful behavior in the financial markets is prohibited. The Q&A on MAR clarifies the scope of the trading restrictions for persons discharging managerial responsibilities under Article 19(11) of MAR.

 

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Keywords: Europe, EU, Securities, Q&A, CSD Regulation, MAR, ESMA