Regulatory Alerts2024-11-19
ESMA Final Report on Technical Advice regarding CSDR Penalty Mechanism Parameters
The European Securities and Markets Authority issued this final report to provide technical advice to the European Commission on amending the parameters for calculating cash penalties under the Central Securities Depositories Regulation. ESMA recommends using alternative central bank interest rates as proxies when official rates are unavailable and advises allowing Central Securities Depositories to use the oldest available reference price for late matching fail penalties to prevent data accumulation. Furthermore, the Authority proposes maintaining the current penalty structure while introducing a moderate increase in penalty rates across most asset classes to better deter settlement fails without diverting resources from industry investments.