In its latest Newsflash, the CCP.A has communicated the current details for the introduction of the CSDR on the CCP.A level for On Exchange transactions. The Newsflash addresses the following details:
Settlement of Cash Penalties
Matching Fields and Client Reporting
Changes to the Rules and Regulations
Please find the original wording of the Newsflash below:
- Settlement of Cash Penalties
The CSDR implementation is supplemented by Delegated Regulation (EU) 2017/389 regarding the parameters for the calculation of cash penalties for settlement fails (and late matching), which represents a substantial change for the security market participants. Due to the current legal uncertainties related to Delegated Regulation (EU) 2018/1229 Article 19 (RTS SEDI) and the ongoing discussions about its removal, CCP.A has decided to implement the following interim solution:
Starting with the 1st of February 2022, all cash penalties resulting from CCP-eligible transactions concluded on the Vienna Stock Exchange are calculated and provided by OeKB CSD in accordance with the provisions of CSDR up to the time of settlement instruction fulfillment (the actual settlement day). These penalties will be collected from and distributed to the Clearing Members (affected by the settlement failure) by CCP.A by means of aggregated PFOD instructions ("payment free of delivery").
Effectively, there will be a single PFOD instruction created by CCP.A and instructed against the participants’ T2S Party BIC at OeKB CSD on the 15th clearing day. The intended settlement date (ISD) of such an instruction is then the 17th clearing day.
This instruction will include the net sum of all cash penalties (debits & credits) from the previous calendar month calculated by OeKB CSD. For these penalties OeKB CSD will provide daily and monthly reporting options.
Once the instructions have been created, clearing members will be informed via email by CCP.A. This email notification will include detailed information about the penalties amount to be received or to be paid. Also, additional matching criteria will be included so that the penalty instruction can be identified by the clearing member accordingly.
Consequently, the clearing members are requested to initiate and perform a matching of such an instruction and ensure sufficient funds on their default DCAs in order to guarantee the successful payment on the ISD. Alternatively, the clearing members may commission CCP.A to counter-match the PFOD instruction. This service is optional and will be subject to an extra handling fee.
- Buy-In Regime Changes
With February 2022, there will no buy-in related changes for the clearing members. For more information on this, please refer to the ESMA statement of December 17th, 2021 (ESMA70-156-5153).
- Matching Fields and Client Reporting
In accordance with Article 13 para. 1 (e) SEDI, CCP.A now enables OeKB CSD to collect information regarding the place of clearing and place of trade through the addition of new settlement instruction fields.
The clearing participants’ reporting provided by CCP.A is not affected by this addition and stays unchanged
- Changes to the Rules and Regulations
Due to the SEDI implementation and as a consequence of the above-mentioned cash penalty process, CCP.A’s General Terms and Conditions of Business (GTC) and the Publications to the General Terms and Conditions will be amended with effect of February 1st, 2022 accordingly.
For detailed information regarding the amendments, please refer to the mark-up versions on the webpage:
Impact on investors: Introduction of the CSDR regime for on exchange transactions as of 1 Feb 2022. The above, however, does not affect OTC business for which the standard CSD conditions apply.