The European Banking Authority has published a final report proposing draft amendments to regulatory technical standards regarding prudential requirements for central securities depositories and designated credit institutions that offer banking-type ancillary services.
CSDR Refit Framework and Systemic Risk Management
The draft amendments respond to regulatory modifications introduced by the Central Securities Depositories Regulation Refit, which permits banking central securities depositories to provide banking-type ancillary services to other central securities depositories.
These ancillary activities include payment services involving cash and foreign exchange transactions. The policy objective is to expand access to foreign currency for non-banking central securities depositories and enhance overall settlement efficiency across Europe.
By updating the regulatory technical standards setting out prudential requirements, the European Banking Authority aims to ensure that potential increases in interconnectedness between central securities depositories do not heighten systemic risk.
Supervisory Mandate and Prudential Scope
The proposed amendments focus on assessing the impact of inter-CSD arrangements on the risk profile of banking central securities depositories and defining the notification requirements for supervisors.
Additional updates to the technical standards reflect recent changes in the Capital Requirements Regulation and align references with the revised Central Securities Depositories Regulation text.
The draft standards were developed under Article 59(5) of the Central Securities Depositories Regulation, which mandates the authority to detail frameworks and tools for monitoring, measuring, managing, reporting, and publicly disclosing credit and intraday liquidity risks.
Central securities depositories must obtain authorisation to provide banking-type ancillary services, which encompass maintaining cash accounts, accepting deposits from securities settlement system participants, and executing foreign exchange payment transactions.
