On 23 July 2014, the Council of the European Union (the “Council”) adopted the proposed regulation on improving securities settlement and regulating central securities depositaries (“CSDs”) (the “CSD Regulation”) with the aim of improving securities settlement within the EU. The CSD Regulation introduces a uniform set of rules for the settlement of financial instruments and on the organization and conduct of CSDs. The new regulation provides for a common settlement period (no later than the second business day after a trade) and requires transferable securities to be recorded electronically (in book entry form) before they are traded on regulated venues. CSDs will be subject to authorization and supervision by home national regulators, although, an EU passport will be available. Certain restrictions on ownership rights of CSDs are also introduced to limit the risks of a CSD’s activities. The CSD Regulation will enter into force 20 days after it is published in the Official Journal of the European Union.

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