Following the approval by the Financial Supervision Commission, Central Depository the CDAD has put into force as of 30 March 2022 its updated Rules to ensure compliance with the Commission Delegated Regulation (EU) 2018/1229 of 25 May 2018 (“Regulation (EU) 2018/1229”) and Commission Delegated Regulation (EU) 2017/389 of 11 November 2016. The main CSDR-related changes in CDAD Rules are the following:
- Amendment of Article 30 related to cash penalties in case of settlement fails. Cash penalties may vary per reason for fail, i.e. lack of securities or cash or late settlement instructions, securities type, place and liquidity of trading.
- Cash penalties will be (i) collected and distributed automatically with the last processing batch on the day following the day of settlement finalization, and (ii) reported to the CSD members on that same day via the existing daily files in .out format. No MT537 reporting will be introduced by CDAD at this stage.
- Partial settlement and Hold & Release mechanism will not be implemented by the CDAD as long as the derogation conditions under Article 12 of Regulation (EU) 2018/1229 have been met.
- CDAD will report settlement fails to the competent authority and provide public disclosure on such fails via its website, in accordance with Article 14 and Article 15 of Regulation (EU) 2018/1229.
- Introduction of new matching criteria such as trade date.
Impact on investors: Clients should note that CSDR requirements related to settlement discipline have been implemented by the Central Depository AD.