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No. 554/2024
26 April 2024

RULES

on securities settlement and central securities depositories.

Article 1. Scope.

These Rules apply to the further implementation of Act No. 7/2020 on central securities depositories, settlement and electronic registration of financial instruments, cf. Regulation (EU) No. 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No. 236/2012 (hereinafter CSDR), with regard to:

• Parameters for the calculation of fines for settlement fails and the operation of central securities depositories in host Member States pursuant to Article 29 of the Act and Articles 7 and 24 of CSDR.

• Prudential requirements for central securities depositories and designated credit institutions offering ancillary banking services pursuant to Articles 47, 54 and 59 of CSDR.

• Content of notifications on internalised settlement pursuant to Article 9 of CSDR.

• Authorisation, supervisory requirements and operational requirements for central securities depositories pursuant to Articles 12, 17, 18, 22, 25, 26, 29, 33, 37, 45, 46, 48, 49, 52, 53 and 55 of CSDR.

• Templates and procedures for notifications and the submission of information on internalised settlement pursuant to Article 9 of CSDR.

• Standard forms, templates and procedures for the authorisation, review and evaluation of central securities depositories, for cooperation between authorities of the home Member State and the host Member State, for consultation of authorities involved in the authorisation for the provision of ancillary banking services, for access in connection with central securities depositories and as regards the format of the records to be kept by central securities depositories pursuant to Articles 17, 22, 24, 29, 33, 49, 52, 53 and 55 of CSDR.

• Discipline in settlement pursuant to Articles 6 and 7 of CSDR.

Article 2. References and definitions.

Retail investors: References in these Rules to retail investors as defined in point 11 of Article 4(1) of Directive 2014/65/EU mean retail investors pursuant to Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Professional investors: References in these Rules to professional investors as defined in point 10 of Article 4(1) of Directive 2014/65/EU mean professional investors pursuant to Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Investment services and activities: References in these Rules to investment services and activities falling under Directive 2014/65/EU mean investment services and investment activities pursuant to Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Execution of orders: References in these Rules to the execution of orders on behalf of clients as defined in point 5 of Article 4(1) of Directive 2014/65/EU mean execution of orders pursuant to Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Execution of settlement purchases on the best available terms: References in these Rules to the obligation to execute settlement purchases on the best available terms in accordance with Article 27 of Directive 2014/65/EU mean best execution pursuant to Article 48 of Act No. 115/2021 on markets for financial instruments.

Transferable securities: References in these Rules to transferable securities referred to in point (a) of point 44 of Article 4(1) of Directive 2014/65/EU mean securities pursuant to point (a) of point 64 of Article 4(1) of Act No. 115/2021 on markets for financial instruments. References in these Rules to transferable securities referred to in point (b) of point 44 of Article 4(1) of Directive 2014/65/EU mean securities pursuant to point (b) of point 64 of Article 4(1) of Act No. 115/2021 on markets for financial instruments. References in these Rules to transferable securities referred to in point (c) of point 44 of Article 4(1) of Directive 2014/65/EU mean securities pursuant to point (c) of point 64 of Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Exchange-traded funds: References in these Rules to exchange-traded funds, as defined in point 46 of Article 4(1) of Directive 2014/65/EU, mean exchange-traded funds pursuant to Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Money market instruments: References in these Rules to money market instruments, other than sovereign debt referred to in point 61 of Article 4(1) of Directive 2014/65/EU, mean money market instruments pursuant to Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Sovereign debt: References in these Rules to sovereign debt or sovereign debt securities referred to in point 61 of Article 4(1) of Directive 2014/65/EU mean sovereign debt pursuant to Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Sovereign issuer: References in these Rules to a sovereign issuer, as defined in point 60 of Article 4(1) of Directive 2014/65/EU, mean a sovereign issuer pursuant to Article 4(1) of Act No. 115/2021 on markets for financial instruments.

Settlement instructions: References in these Rules to settlement instructions as defined in point (i) of Article 2 of Directive 98/26/EC mean instructions pursuant to Article 2(1) of Act No. 90/1999 on the finality of instructions in payment systems and securities settlement systems.

Article 3. Implementation of regulations.

With these Rules, the following Commission Regulations (EU) shall enter into force in Iceland, as published in the EEA Supplement to the Official Journal of the European Union No. 62 of 24 September 2020, pp. 1-206, with the adaptations resulting from the decision of the EEA Joint Committee [No. 20/2019, which is published in the EEA Supplement to the Official Journal of the European Union No. 48 of 16 July 2020, p. 36, cf. also Protocol 1 on horizontal adaptations to the Agreement on the European Economic Area, cf. the Act on the European Economic Area, No. 2/1993, in which the Protocol is incorporated:

Commission Delegated Regulation (EU) 2017/389 of 11 November 2016 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council as regards the parameters for the calculation of cash penalties for settlement fails and the operations of central securities depositories in host Member States. Commission Delegated Regulation (EU) 2017/390 of 11 November 2016 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on certain prudential requirements for central securities depositories and designated credit institutions offering ancillary banking services. Commission Delegated Regulation (EU) 2017/391 of 11 November 2016 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards further specifying the content of the notification of internalised settlement. Commission Delegated Regulation (EU) 2017/392 of 11 November 2016 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on authorisation, supervisory and operational requirements for central securities depositories. Commission Implementing Regulation (EU) 2017/393 of 11 November 2016 laying down implementing technical standards with regard to the templates and procedures for the reporting and transmission of information on internalised settlements in accordance with Regulation (EU) No 909/2014 of the European Parliament and of the Council. Commission Implementing Regulation (EU) 2017/394 of 11 November 2016 laying down implementing technical standards with regard to standard forms, templates and procedures for authorisation, review and evaluation of central securities depositories, for the cooperation between authorities of the home Member State and the host Member State, for the consultation of authorities involved in the authorisation to provide ancillary banking services, for access involving central securities depositories, and with regard to the format of the records to be maintained by
central securities depositories in accordance with Regulation (EU) No 909/2014 of the European Parliament and of the Council.

These rules also give effect in this country to the following Commission Regulations (EU) published in the EEA Supplement to the Official Journal of the European Union No. 66 of 14 October 2021, pp. 3-55 and 116-117, with the adaptations resulting from the Decision of the Joint EEA Committee No. 309/2019, which is published in the EEA Supplement to the Official Journal of the European Union no. 14 of 5 March 2020, p. 68, and Joint EEA Committee Decision no. 219/2021, see also Note 1 to the Agreement on the European Economic Area, see Act on the European Economic Area, no. 2/1993, where the Note is enacted:

Transposed Commission Regulation (EU) 2018/1229 of 25 May 2018 amending Regulation (EU) No 909/2014 of the European Parliament and of the Council as regards technical supervisory standards on settlement discipline. Transposed Commission Regulation (EU) 2021/70 of 23 October 2020 amending transposed Regulation (EU) 2018/1229 on technical supervisory standards on settlement discipline, as regards its entry into force.

With these Rules, transposed Commission Regulation (EU) 2022/1930 of 6 July 2022 amending the technical supervisory standards laid down in transposed Regulation (EU) 2018/1229 as regards the date on which provisions related to rules on settlement incentives apply, which is published in the EEA Supplement to the Official Journal of the European Union no. 45 of 15 June 2023, p. 71-73, with the adaptations resulting from Joint EEA Committee Decision no. 61 of 17 March 2023, see also Note 1 to the Agreement on the European Economic Area, see Act on the European Economic Area, no. 2/1993, where the Note is enacted.

With these Rules, transposed Commission Regulation (EU) 2023/1626 of 19 April 2023 amending the technical supervisory standards laid down in transposed Regulation (EU) 2018/1229 as regards the penalty regime for settlement failures in relation to settled transactions submitted by a central counterparty for settlement, which is published in the EEA Supplement to the Official Journal of the European Union no. 34 of 25 April 2024, p. 76-78, with the adaptations resulting from Joint EEA Committee Decision no. 323 of 8 December 2023, see also Note 1 to the Agreement on the European Economic Area, see Act on the European Economic Area, no. 2/1993, where the Note is enacted.

Article 4. Entry into force.

These Rules, which are made pursuant to items 1-10 and 12-24 of Article 32 of Act no. 7/2020 on securities depositories, settlement and electronic registration of financial instruments, enter into force immediately. Upon entry into force of these Rules, Rules no. 1055/2023 on securities settlement and securities depositories are repealed.

Central Bank of Iceland, 26 April 2024.

	Ásgeir Jónsson, Governor of the Central Bank.	Rannveig Júníusdóttir, Executive Director.

Department B - Date of publication: 14 May 2024