Central Securities Depositories (CSDs) are responsible for the registration and safekeeping of securities as well as the settlement of securities in exchange for cash through their securities settlement system. They track how many securities have been issued, by whom these securities have been issued and who is the owner of these securities.
Central Securities Depositories Regulation (CSDR) and the related National Framework
Regulation (EU) No 909/2014 of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories (CSDR) was published in the Official Journal of the European Union on 28 August 2014 and entered into force on 17 September 2014.
The main objective of the CSDR is to increase the safety and efficiency of securities settlement and CSDs in the EU by providing, among others, for the following:
- shorter settlement periods;
- settlement discipline measures (mandatory cash penalties and ‘buy-ins’ for settlement fails);
- an obligation regarding dematerialisation for most securities;
- strict organisational, conduct of business and prudential requirements for CSDs;
- strict access rights to CSD services; and
- increased prudential and supervisory requirements for CSDs and other institutions providing banking services ancillary to securities settlement.
All CSDs established in the European Union are subject to the CSDR.
Article 1 of the Law of 6 June 2018 on central securities depositories provides that the CSSF is the competent authority in charge of carrying out the tasks provided for in the CSDR with regard to the authorisation and supervision of CSDs established in Luxembourg.
The role of the CSSF as the national competent authority under the CSDR is without prejudice to the role of the Banque centrale du Luxembourg (BCL) as a member of the Eurosystem “promoting the safety and efficiency of payment, clearing and settlement systems under its oversight mandate” and its national oversight mission as stipulated in the Law of 23 December 1998 related to the monetary statute and to the BCL.
In the context of the CSDR, the CSSF and the BCL cooperate closely and exchange information for the purpose of carrying out their duties.
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