CSDR | Further uncertainty on the horizon?

It’s been reported (here), that we may be in for a year’s delay, to February 2022, in the compliance date for Central Securities Depositories Regulation (CSDR) settlement discipline regime.

This follows an amalgamation of uncertainty: (a) lobbying efforts by various industry groups re potential damage to the industry & market participants; (b) an initial extension to February 2021, from September 2020; and (b) the UK confirming it would not on-shore CSDR post Brexit.

Immediate feedback from our practitioners indicate this news would be both a surprise and in many instances greatly welcomed; allowing market participants to take the opportunity that this latest extension provides to move away from tactical solutions, to think more strategically about exposure, infrastructure, technology & operating model. Further feedback indicates a previous expectation of a soft go-live date, with mandatory components coming into force over the course of the first year of implementation; this more wholesale extension will require a lot of programme & IT development planning and management, as budgets may need re-writing, scope changes addressed, and co-dependent releases alongside SWIFT November release may need decoupling.

At JDX, we continue to partner with our customers across CSDR programmes – we eagerly await further announcements in the coming weeks / months regarding CSDR compliance.

Disclaimer, this is an opinion responding to an online journal entry, and not business or legal advice to be acted upon, pending official statements from regulators