Part of objective 3 of the capital markets union (CMU) action plan, action 13 aims to develop cross-border settlement services.
The European post-trade landscape remains fragmented along national lines, impairing cross-border investment. Amendments to the rules under which central securities depositories (CSDs) can provide cross-border settlement services and the functioning of the CSD cross-border passport could contribute to the development of a more integrated post-trading landscape in the EU. The subsequently enhanced competition among providers of settlement services would lower the costs incurred by investors and companies in cross-border transactions and strengthen cross-border investment.
The 2020 CMU action plan announced that, to improve the cross-border provision of settlement services in the EU without negatively impacting financial stability, the Commission would review the rules covering a wide range of topics, including: (i) the cross-border provision of services by CSDs on the basis of a CSD passport and (ii) the procedures and conditions under which CSDs have been authorised to designate credit institutions or themselves to provide banking-type ancillary services.
The Commission conducted a targeted consultation, which closed in February 2021, and published an inception impact assessment in March 2021. It also published on 1 July 2021 a report on the settlement and central securities depositories regulation (CSDR).
- Inception impact assessment on the CSDR review (March 2021)
- Targeted public consultation on the CSDR review (closed in February 2021)
- Commission report on CSDR Review (1 July 2021)
The Commission presented a proposal in March 2022 to make securities settlement in the EU safer and more efficient, thereby improving the attractiveness of the EU's capital markets and ultimately contributing to the financing of our economy. This proposal would help address the fragmentation in the European post-trade landscape by strengthening cross-border investment and thereby the Capital Markets Union by improving the passporting regime for Central Securities Depositories and the cooperation between supervisory authorities. It also aims to reduce compliance costs and regulatory burdens for Central Securities Depositories, as well as facilitate their ability to offer a broader range of services cross-border, while improving their cross-border supervision.
- Press release on CSDR proposal (March 2022)