ESMA Central Security Depo FAQ

On Mar. 13, ESMA issued FAQ for central security depository rules.

  • On central securities depositaries regulation (CSDR) provisions, from Mar. 30, 2017.
  • Follows Mar. 2017 publication of CSDR regulations in EU official journal, see #29822.
  • General Questions (Q. 1)
  • On meaning of providing regulatory reporting in CSDR annex list of ancillary service.
  • Authorization, Organization (Q. 1-3)
  • Deadline for CSD application for authorization, begin on filing complete applications.
  • Procedure relating to transfer of issuance accounts and records to ensure continuity.
  • Organizational requirement, including need for separate committee of risk and audit.
  • Information to be provided to relevant authority, in event of change of management.
  • Meaning of independent, related to requirement to member of a management body
  • Recordkeeping rules when first become applicable, how applied to ancillary service.
  • Obligation to verify LEI detail, and supply information on types of securities account.
  • Conduct of Business, Risk (Q. 4-7)
  • On use of internal or proprietary messaging standards in participant communication.
  • Protection of securities of participants and their clients, from time of authorization.
  • Scope of definitions of critical service provider and of market infrastructure in RTS.
  • Mar. 2017 FAQ Update
  • On Mar. 31, 2017, ESMA issued updated FAQs on implementation of CSDR regulations.
  • Update clarifies introduction of additional national requirements, on sharing of staff.
  • And LEIs, protection of securities of participants and banking-type ancillary services.
  • Jun. 2017 FAQ Update
  • On Jun. 2, 2017, ESMA issued updated FAQs on implementation of CSDR regulations.
  • CSDs’ investment policy; access to CSDs; and conditions for services in other States.
  • CSD can use overnight deposits and time deposits with a central bank, bank, or CSD.
  • Provided depositing CSD can have immediate and unconditional access to cash asset.
  • Need to provide a response to an access request from an issuer within three months.
  • No extension of time period, even if CSD requests additional information from issuer.
  • Provide NCA of home State with measures to allow users to comply with national law.
  • Include actual evidence that the measures do ensure compliance, e.g. legal opinions.
  • Oct. 2017 Updates
  • On Oct. 2, ESMA issued updated questions on protecting securities, ancillary services.
  • NCA to inform CSD of decision to authorize within six months of complete application.
  • Require separate committee on risk, audit and remuneration, but can share members.
  • Substantive change in management requires CSD to inform relevant NCA in advance.
  • Nov. 2017 Updates
  • On Nov. 17, 2017, ESMA updated FAQs on the implementation of CSDR regulations.
  • Update provided detailed answers, regarding specific aspects of relevant authorities,
    conduct of business rules, protection of securities, and also prudential requirements.

Regulators EU CMSN; EU ESMA
Entity Types B/D; Bank; Depo; Exch
Reference 10/02/2017, FAQ ESMA70-708036281-2, PR, 6/2/2017, FAQ ESMA70-708036281-2, PR, 3/31/2017, GD, PR, 3/13/2017, CSDR Reg 909/2014, FAQ, ESMA70-708036281-2, PR, 11/17/2017
Functions Compliance; Financial; Legal; Reporting; Trade Reporting; Trading
Countries European Union
Products Clearing; Securities
Regions EMEA
Rule Type Guidance
Rule Date 3/13/2017
Effective Date 6/2/2017
Rule Id 31434
Linked to Rule :29822
Report Issue 12/1/2017
Report Section EU

Last substantive update on 11/19/2017