ESMA publishes consultation on CSDR penalty mechanism
18 December 2023 Europe
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The European Â鶹´«Ã½ and Markets Authority (ESMA) has published a consultation paper on technical advice to the European Commission on the CSDR penalty mechanism.
The consultation aims to collect data on the effectiveness of the current penalty mechanism in discouraging settlement failures and incentivising their rapid resolution, and will run until 29 February 2024.
The publication seeks feedback on ESMA’s preliminary proposals regarding alternative parameters, when the official interest rate for overnight credit charged by the central bank issuing the settlement currency is not available.
In addition, the consultation requests feedback regarding the treatment of historical reference data for the calculation of late matching fail penalties, and alternative methods for calculating cash penalties.
The consultation aims to collect data on the effectiveness of the current penalty mechanism in discouraging settlement failures and incentivising their rapid resolution, and will run until 29 February 2024.
The publication seeks feedback on ESMA’s preliminary proposals regarding alternative parameters, when the official interest rate for overnight credit charged by the central bank issuing the settlement currency is not available.
In addition, the consultation requests feedback regarding the treatment of historical reference data for the calculation of late matching fail penalties, and alternative methods for calculating cash penalties.
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