ECSDA publishes draft of Settlement Fail Penalties Framework

The European Central Securities Depositories Association (ECSDA) has published a draft of its future Settlement Fail Penalties Framework (the Framework). In an effort of compliance with the Central Securities Depositories Regulation 909/2014 (CSDR) (particularly with regards to articles 6 & 7), European CSDs have created the Framework, seeking to harmonise across four key pillars: measures to prevent settlement fails: CSDs´ settlement functionalities aiming at preventing settlement fails (e.g. bilateral cancellation, hold & release, partial settlement) and possible derogation from the requirements to develop some of these functionalities by smaller CSDs; requirements to monitor and report settlement fails: CSDs are required to monitor and analyse settlement fails and CSD participants´ settlement efficiency, including setting up working groups to define measures to improve efficiency; requirements for CSDs to charge cash penalties to users that cause…

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