Final draft adopted by the EBA and submitted to the European Commission
The draft Regulatory Technical Standards (RTS) on prudential requirements for central securities depositories (CSDs) have been developed within the framework established by the Regulation on settlement and Central Securities Depositories (CSD-R), which aims to increase the safety and efficiency of securities settlement and settlement infrastructures.
The European Banking Authority (EBA) launched today a public consultation on draft Regulatory Technical Standards (RTS) on prudential requirements for central securities depositories (CSDs). These RTS have been developed within the framework established by the Regulation on settlement and Central Securities Depositories (CSD-R), which aims to increase the safety and efficiency of securities settlement and settlement infrastructures. The consultation runs until 27 April 2015.
The first part of the draft RTS defines the capital requirements for CSDs with a view to harmonise the diverse practices across the EU, as well as to specify a prudential framework for those CSDs that provide banking-type ancillary services.
As CSDs providing banking-type of ancillary services need to comply in parallel with the capital requirement rules of the Capital Requirements Regulation (CRR), the possible differences between these two regimes have been considered in a way to ensure that the stricter rules on prudential supervision apply.
The second part of the draft RTS includes the methodology to determine how an additional risk-based capital surcharge should be calculated by those CSDs offering banking-type ancillary services so as to reflect the risks resulting from the provision of intra-day credit.
The last part of the draft RTS lay out the requirements regarding the framework and the tools the CSDs are required to develop to properly monitor, measure, manage and disclose credit and liquidity risks, including those that occur intraday.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 27 April 2015.
A public hearing will then take place at the EBA premises on Monday 23 March at 13:00 UK time. All contributions received will be published following the close of the consultation, unless requested otherwise.
The draft RTS have been prepared according to Articles 47, 54 and 59 of Regulation (EU) No 909/2014 (‘CSD-R'), which mandates the EBA, in close cooperation with the European Securities and Markets Authority (ESMA) and the members of the European System of Central Banks (ESCB), to develop three draft regulatory technical standards (RTS) on prudential requirements for central securities depositories (CSDs).
In developing these technical standards, the EBA has also taken into account Article 46 of Regulation (EU) No 909/2014 (‘CSD-R') and the relevant technical standards being developed by ESMA, the CPSS-IOSCO Principles for Financial Market Infrastructures (‘CPSS-IOSCO principles' or ‘PFMIs) and the BCBS principles for the monitoring and the management of intraday liquidity.
The European Banking Authority (EBA) published today its draft Regulatory Technical Standards (RTS) on prudential requirements for Central Securities Depositories (CSDs). These RTS will define a prudential framework for CSDs and harmonise calculations for their capital requirements which currently vary across Member States. These RTS have been developed within the framework of the Central Securities Depositories Regulation (CSDR) to increase the safety and efficiency of securities settlement and settlement infrastructures.
The draft RTS set out the prudential framework that will apply to both CSDs offering banking-type ancillary services and licensed as a credit institution and those CSDs that are not permitted to offer such services but can designate a credit institution to that effect. The EBA specifies the framework for determining capital requirements for all CSDs along with additional requirements that will only apply to those CSDs offering banking-type ancillary services.
The framework for all CSDs builds on the existing banking framework and is applied in a targeted manner that takes into account the specific risk profile of CSDs and will ensure adequate protection against operational, legal, custody, investment and business risks. In addition, those CSDs providing banking-type of ancillary services will need to comply with the additional capital requirements laid down in the Capital Requirements Regulation (CRR). As a consequence, the EBA considered the possible differences between the CRR and CSDR regimes so as to ensure that stricter rules on prudential supervision apply, as required by the CSDR, without duplicating the existing applicable prescriptions in the CRR.
For CSDs offering banking-type ancillary services and licensed as a credit institution, the EBA also includes in its RTS the methodology for determining how an additional risk-based capital surcharge should be calculated, in order to better reflect the risks resulting from the provision of intraday credit. In addition, for those CSDs, requirements also specify the framework and the tools that CSDs are required to develop in order to properly monitor, measure, manage and disclose credit and liquidity risks.
The draft RTS have been developed according to Articles 47, 54 and 59 of Regulation (EU) No 909/2014 (CSDR), which mandates the EBA to develop three draft regulatory technical standards (RTS) on prudential requirements for central securities depositories (CSDs).
In developing these technical standards, the EBA has also taken into account Article 46 of Regulation (EU) No 909/2014 (CSDR) and the relevant technical standards being developed by ESMA, the CPSS-IOSCO Principles for Financial Market Infrastructures (‘CPSS-IOSCO principles' or ‘PFMIs) and the BCBS principles for the monitoring and the management of intraday liquidity.