EBA consults on prudential requirements for central securities depositories (CSDs)

The European Banking Authority (EBA) launched today a public consultation on draft Regulatory Technical Standards (RTS) on prudential requirements for central securities depositories (CSDs). These RTS have been developed within the framework established by the Regulation on settlement and Central Securities Depositories (CSD-R), which aims to increase the safety and efficiency of securities settlement and settlement infrastructures. The consultation runs until 27 April 2015.

The first part of the draft RTS defines the capital requirements for CSDs with a view to harmonise the diverse practices across the EU, as well as to specify a prudential framework for those CSDs that provide banking-type ancillary services.

As CSDs providing banking-type of ancillary services need to comply in parallel with the capital requirement rules of the Capital Requirements Regulation (CRR), the possible differences between these two regimes have been considered in a way to ensure that the stricter rules on prudential supervision apply.

The second part of the draft RTS includes the methodology to determine how an additional risk-based capital surcharge should be calculated by those CSDs offering banking-type ancillary services so as to reflect the risks resulting from the provision of intra-day credit.

The last part of the draft RTS lay out the requirements regarding the framework and the tools the CSDs are required to develop to properly monitor, measure, manage and disclose credit and liquidity risks, including those that occur intraday.

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 27 April 2015.

A public hearing will then take place at the EBA premises on Monday 23 March at 13:00 UK time. All contributions received will be published following the close of the consultation, unless requested otherwise.

Legal basis and background

The draft RTS have been prepared according to Articles 47, 54 and 59 of Regulation (EU) No 909/2014 (‘CSD-R'), which mandates the EBA, in close cooperation with the European Securities and Markets Authority (ESMA) and the members of the European System of Central Banks (ESCB), to develop three draft regulatory technical standards (RTS) on prudential requirements for central securities depositories (CSDs).

In developing these technical standards, the EBA has also taken into account Article 46 of Regulation (EU) No 909/2014 (‘CSD-R')  and the relevant technical standards  being developed by ESMA, the CPSS-IOSCO Principles for Financial Market Infrastructures (‘CPSS-IOSCO principles' or ‘PFMIs) and the BCBS principles for the monitoring and the management of intraday liquidity.