Response to consultation on Regulatory Technical Standards on on the threshold of activity at which Central Securities Depositories (CSDs) providing ‘banking-type ancillary services’
Q1. Do you agree with the proposed approach for determining the threshold referred to in Art. 54(5) of the CSDR?
Yes, we agree with the proposed approach. In our view, this methodology seems more flexible than the previous model, as CSDs with low-risk use of CoMB will not be burdened with excessive controls and requirements.
Q2. Do you think that other elements should be taken into account in the proposed approach? If yes, which ones?
In addition to the parameters already considered, the proposed model could also designate a different weight per type (i.e. settlement instructions, cash distributions). For instance, CoBM utilized exclusively for corporate action payments—rather than for regular securities settlement—may present a lower risk profile. This is because such transactions do not occur on a daily basis, and the associated cash flows are generally predictable in advance.
Q3. Do you agree with the proposed levels set out in the proposed approach for the different parameters?
Yes, we agree with the proposed levels for the different parameters. It seems that they provide a well-balanced framework.
Q4. Do you agree with the proposed basic risk management and prudential requirements? If no, please provide rationale and an alternative proposal.
In cases of CSDs with extremely low use of CoBM, such as ATHEXCSD (with current use of CoBM being 0.0000056% of our total settlement activity), the proposed risk management and prudential requirements impose a disproportionate regulatory and operational burden on such CSDs that demonstrably present no systemic, credit, or liquidity risk in this context.
Q5. Do you agree with the proposed level of settlement activity, which determines whether only basic or both basic and advanced risk management and prudential requirements are applied?
We do not agree with the proposed framework, since in cases of CSDs with extremely low use of CoBM, it imposes on them a disproportionate regulatory and operational burden. Instead, we propose that in cases of CSDs with use of CoBM below 0,50% and 1,5 b., no basic and advanced risk management and prudential requirements should apply.
Q6. Do you agree with the proposed advanced risk management and prudential requirements? If no, please provide rationale and an alternative proposal.
We think that the proposed basic and advanced risk management and prudential requirements should apply only for CSDs operating above the threshold of 1,5% and 3,75b., which potentially have a higher liquidity risk.