Solutions / Regulation
Central Securities Depositories Regulation (CSDR)
Prepare prudently
On Feb 1, 2022, Central Securities Depositories Regulation (CSDR) went into effect to drive automation and efficiency into post-trade processes. This new regulation impacts all trades settled on a European Central Securities Depository (CSD) which means buy-side and sell-side firms fall within its scope. Impacted firms should proactively seek to evolve their processes to optimize operational workflows and reduce settlement failures and fail resolution times.
Key impacts
- All European CSDs must complete settlement for on-exchange trades within two days of the transaction date (T+2)
- Timely dissemination and acknowledgment of allocation instructions now mandatory
- CSDR penalties will be awarded for any settlement fails
- If the settlement remains unresolved, mandatory buy-in and potential additional charges will be instated
Bloomberg’s solution
Discover how Bloomberg can help firms navigate the settlement discipline regime and utilise essential tools to ensure high settlement rates and in turn avoid costly failed settlements.
- FailStation (FSTN) – Bloomberg’s CSDR settlement-exception management tool
- Liquidity Assessment (LQA) – an award-winning liquidity solution
- Regulatory and accounting data solutions – supported by our team of experts
- Webinar – comply with CSDR’s Settlement Discipline Regime
- FixNet Post-Trade Allocation Network & FixNet Transformer (Data transformation/automation service)
- All European CSDs must complete settlement for on-exchange trades within two days of the transaction date (T+2)
- Timely dissemination and acknowledgment of allocation instructions now mandatory
- CSDR penalties will be awarded for any settlement fails
- If the settlement remains unresolved, mandatory buy-in and potential additional charges will be instated
Automate workflows
From execution to settlement, Bloomberg offers automated solutions to help firms adapt and evolve their workflows in response to CSDR.
- Understand the liquidity profile of a bond prior to making a price
- Allocation delivery and transformation services to meet article 6 timeline requirements
- Assess likelihood of settlement fail cost into the price
- Estimate costs of mandatory buy-ins
- Bring entire exchange of trade and settle information within T+0
- Evaluate the relevant CSDR rule sets applying to each security type across different markets
- Anticipate and track which trades are approaching fail status and why
- Monitor the probability of a trade’s failure and calculate likely fail costs
- Auto-organize trades based on risk thresholds, fail reasons and responsibilities
- Manage the communication process of either a pre-extension period buy-in or a mandatory buy-in linked with the OMS
- Minimize potential cash compensation costs by aligning workflows to the transactions likely to have the largest costs
- Identify pain points and fail trends using analytic reports
- Reduce the number of days transactions fail by streamlining workflows and reporting
Research & Insights
