Central securities depository (EU)

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A central securities depository within the European Union ( CSD EU or English : European Central Securities Depository , ECSD) is a legal entity in accordance with the Regulation (EU) No 909/2014 (Zentralverwahrerverordnung). About the central depository of securities in the September 17, 2014 Power has come. The central securities depository regulation and the uniform approval of central securities depositories in the European Union will improve the delivery and settlement of securities in the EU and the previous securities law will be fundamentally harmonized and uniformly regulated across the Union .

With this regulation and the standardization of the regulations on central securities depositories in the EU, the European Union intends to strengthen the central market infrastructures in Europe and stabilize the markets even in times of crisis.

Central securities depository within the meaning of the regulation

According to Art. 2 para. 1 no. 1 of the Central Securities Depository Ordinance (CSDR), legal entities that operate a securities delivery and settlement system in accordance with Section A number 3 of the Annex to the Ordinance and who provide at least one other core service in accordance with Section A of the Annex.

Third country central securities depositories are, according to Art. 2 para. 1 no. 2 CSDR " legal person with registered office in a third country that provides a service similar to the core service in accordance with Section A number 3 of the Annex and at least one other core service in accordance with Section A of the Annex ".

Only central securities depositories or central banks acting as central securities depositories, which are subject to this regulation, should be allowed to operate securities delivery and settlement systems in order to ensure the safe functioning of the securities delivery and settlement systems. Exceptions may exist under special circumstances and within the framework of strict legal provisions under national law for the systems of direct securities custody, as well as according to Art. 1 Para. 4 of the CSDR.

Demarcation

No central securities depositories within the meaning of the CSDR are " entities that do not operate securities delivery and settlement systems, such as registrars, transfer agents , authorities, entities entrusted with the management of a registration system set up in accordance with Directive 2003/87 / EC or Regulation (EU) No. Central counterparties subject to 648/2012 of the European Parliament and of the Council (10) ”.

Central securities depository authorization

According to Article 16 (1) CSDR, every legal person that falls under the definition of the Central Securities Depository Regulation (CSDR) as a central securities depository must be notified by the competent authority of the Member State in which it is based before commencing its activities and for a specific area of ​​activity be admitted within six months of submitting a complete application or admission be refused with justified reasons. The prerequisites for admission must be present at all times during the entire activity as a central securities depository within the meaning of the CSDR (Art 16 para. 3 CSDR). If there are significant changes that affect the fulfillment of the prerequisites required for authorization, the central securities depository and its independent auditor must notify the competent authority immediately (Article 16 (4) CSDR).

Each authorized CSD may provide the services listed in the annex to the CSDR throughout the territory of the European Union, including by setting up a branch, provided these services are covered by the authorization (Article 23 CSDR).

tasks

The tasks of the central securities depositories according to the Central Securities Depositories Ordinance are regulated in the Annex to the Ordinance. In

  • Section A the core services of the central securities depository,
  • Section B the non-banking ancillary services of the central securities depositories that do not involve credit or liquidity risk,
  • in section C the banking-like ancillary services.

User Committee

For each securities settlement and settlement system operated by the CSD, “ a user committee must be formed to give users the opportunity to advise the CSD's management body on material issues that concern them ”. “ The users committee should represent the interests of the various users of CSDs, including the interests of holders of different types of securities ”.

The user committee carries out its activities independently and without the direct influence of the management of the central securities depository (Art. 28 (1) CSDR).

In general, the relationships between central securities depositories and their users should “be made transparent with the help of rules of conduct. In particular, a CSD should have publicly available, transparent, objective and non-discriminatory criteria for participating in the securities settlement and settlement system, according to which access for participants should only be restricted on the basis of the risks involved ”.

For this it is necessary to ensure that

  • the competent authorities can take rapid and appropriate remedial measures to address any unjustified, obstructive and discriminatory refusal to provide services by CSDs to participants and
  • Central securities depositories announce the prices and fees of their services in advance and bindingly.

transparency

Transparent rules for corporate management and control are intended to ensure that " management, members of the management body, shareholders and participants who can exercise control within the meaning of Directive 2013/34 / EU on the activities of the central securities depository are able to to ensure solid and prudent management of the central securities depository ”and“ that the interests of the shareholders, the management and the employees of the central securities depository on the one hand and the interests of its users, in whose service the central securities depositories ultimately are on the other hand, are taken into account ”.

According to Article 21 of the CSDR, the name and area of ​​activity of each CSD is to be recorded in a CSD directory, including all branches, CSD links and the information required under Article 31 CSDR. ESMA makes the register available on its website and updates it (see also Art 58 CSDR).

According to Art. 26 (4) CSDR, each central securities depository must make its regulations for corporate management and control and the regulations applicable to its activities publicly available.

Documentation obligation

According to the CSDR, the central securities depositories are obliged to keep sufficient documentation for all their services and to keep these records (at least ten years) so that “ the competent authorities can exercise effective supervision over the activities of the central securities depositories ”.

Secondary activities, investments, outsourcing

Secondary activities and participations of central securities depositories

Central securities depositories should not enter into any risks with “ activities other than those that are subject to the authorization requirement under this Ordinance . Central securities depositories should also not hold a stake in the sense as defined in the CSDR by reference to Directive 2013/34 / EU of the European Parliament and of the Council (12), nor should they directly or indirectly hold 20% or more of the voting rights or of the capital of other institutions than those providing similar services, unless such participation has been approved by the competent authorities of the CSDs on the basis that it does not materially increase the risk profile of the CSDs ”. An essential criterion for admissible or impermissible secondary activities and investments is that they do not entail any unreasonable risks for the central securities depositories' core services.

Central securities depositories and the providers of banking services can, under certain circumstances, bundle their services within a single group of companies.

This point, the provision of ancillary services by European central securities depositories, was very controversial in the negotiations on the CSDR and the European Commission took a very restrictive position here.

Outsourcing of activities

Central securities depositories can outsource their services under strict conditions " provided that the risks that may arise through appropriate outsourcing agreements are controlled ". However, central securities depositories cannot delegate their responsibility. In particular, the outsourcing must not impair the supervision of the central securities depositories and their monitoring.

Capital requirements

According to Article 47 (1) of the CSDR, the “ equity of a central securities depository together with retained earnings and other reserves must be in an appropriate proportion to the risks associated with its activities ”.

At sight

The central securities depositories under the CSDR are primarily subordinate to the national supervisory authorities of the Union member states . These supervisory authorities must be given sufficient powers by the member states of the Union and “must be able to punish unlawful behavior by the CSDs or their staff or by third parties by applying dissuasive sanctioning systems”.

Whistleblower

In order for the supervisory authorities to actually discover potential violations, “ effective mechanisms should be used to ensure that more potential or actual violations of this regulation are reported to the competent authorities ”. This also includes protection of persons who report potential or actual violations of this regulation, as well as persons who are accused of such violations (see presumption of innocence / presumption of guilt ).

Sanctions

CSDR violations by central securities depositories must result in prompt and appropriate corrective action by the authorities. The oversight and sanctions must be effective, proportionate and dissuasive.

In order to ensure deterrence and the coherent application of sanctions in all Member States, taking into account the Charter of Fundamental Rights of the European Union , the " Regulation contains a list of essential administrative sanctions and other measures that must be available to the competent authorities, the power to enforce them To impose sanctions and other measures on all natural and legal persons responsible for an infringement, provide a list of the main criteria for determining the degree and nature of these sanctions and other measures, as well as the amount of fines. When setting the fines, account should be taken of factors such as the financial benefits identified as a result of the infringement, the gravity and duration of the infringement, the aggravating or attenuating circumstances and the necessary dissuasive effect of the fines and, where appropriate, a reduction should be provided in the event of cooperation with the competent authority will ".

See also

literature

  • Dominik Freudenthaler, Ben-Bendict Hruby in Die Zentralverwahrer-VO , ecolex , Vienna 2014,

Web links

Individual evidence

  1. ↑ An international central securities depository ( international central securities depository , ICSD), a CSD that businesses in the international as well as in certain local markets , mostly through direct or indirect (through local banks ) linking to the national central securities depository (CSD), unwinds . There are three relevant ICSDs based in the EU: Euroclear Bank (Brussels), Clearstream Banking (Luxembourg) and SIX SIS (Zurich).
  2. ^ Central Securities Depositories Regulation.
  3. ↑ For the term "securities", see Article 4 Paragraph 1 No. 15 of Directive 2014/65 / EU.
  4. ↑ "Delivery and billing" or "processing" is required according to Art. 2 Para. 7 CSDR the full “entering into a securities transaction, regardless of where it is entered into, with the aim of discharging the obligations of the parties involved in that transaction by the transfer of money or securities or both ”.
  5. ↑ See communication from the Financial Stability Council of October 20, 2010 on the revision and expansion of the existing standards.
  6. ↑ See Article 18 (2) CSDR and Recital 30 of the CSDR.
  7. ↑ See Recital 39 of the CSDR.
  8. ↑ See Recital 26 of the CSDR.
  9. ↑ According to Article 16, Paragraph 2 of the CSDR, the core services in accordance with Section A of Annex CSDR and permissible non-bank-like ancillary services in accordance with Section B of Annex CSDR must be specified.
  10. ↑ Art. 17 para. 8 CSDR.
  11. ↑ See Art 17 Para. 1 CSDR.
  12. ↑ On the term “management body” of a central securities depository, see Art. 2 para. 1 no. 45 CSDR.
  13. ↑ See Art 28 CSDR and Recital 35 ff of the CSDR.
  14. ↑ See also Art 32 CSDR.
  15. ↑ See Articles 33 and 49 ff CSDR and recitals 40 and 56 of the CSDR as well as the voluntary European Code of Conduct for Clearing and Settlement of 7 November 2006.
  16. ↑ For the term "competent authority" see Art 2 Para. 1 No. 17 and 18 CSDR and to regulate the tasks Art 10 ff CSDR.
  17. ↑ See Art 34 CSDR and recitals 40, 56 and 60 of the CSDR.
  18. ↑ See also Art. 26 f CSDR and Recital 35 of the CSDR.
  19. ↑ See Recital 37 of the CSDR.
  20. ↑ For CSDR connections, see Art 48 CSDR.
  21. ↑ See Art 29 CSDR and Recital 55 of the CSDR.
  22. ↑ See Art. 18 Para. 3 and 54 ff CSDR and Recital 29 of the CSDR.
  23. ↑ See recital 31 ff of the CSDR.
  24. ↑ See Recital 46 of the CSDR.
  25. ↑ Dominik Freudenthaler, Ben-Bendict Hruby in Die Zentralverwahrer-VO , ecolex , Vienna 2014, p. 1024. See also Art 52 Para. 1 of the CSDR in the version of March 7, 2012 according to COM (2012) 73 final.
  26. ↑ See Art 30 CSDR and Recital 38 of the CSDR with certain exceptions when activities are outsourced to public bodies.
  27. ↑ Pursuant to recital 61 of the CSDR, in accordance with the Commission's communication “Strengthening the sanctions regimes in the financial services sector” of December 8, 2010, “ a review of the existing sanctioning powers and their practical application was carried out in order to allow the convergence of sanctions across the spectrum of supervisory activities promote ". See also Art 22 CSDR and Recital 63 of the CSDR.
  28. ↑ See Recital 64 of the CSDR.
  29. ↑ See Art. 61 ff CSDR and Recital 61 ff of the CSDR.
  30. ↑ See Recital 63 of the CSDR.