EBF has published its comments on the Commission’s proposal for a Regulation improving securities settlement and on central securities depositories (CSDs). EBF’s key points include:
- the standard settlement cycle of T+2 is unsuitable for repo trading, OTC trading and trading in illiquid securities (for example, those issued by SMEs);
- delivery versus payment (DVP) should apply only to trades executed on MiFID trading venues;
- buy-in provisions where settlement fails should be applied with flexibility so that a receiving market participant may decide to wait and receive the securities late rather than being compensated in cash; and
- allowing CSDs to provide banking or other ancillary services is contrary to the safety objectives of the Regulation.
Additionally, and given the importance of definitional consistency for an effective implementation of the Regulation across the Single Market, EBF will soon submit its comments on key terms of the proposed Regulation. (Source:EBF's Comments on CSD Regulation)