The EBA consults on draft technical standards setting out the threshold for prudential risk management requirements of central securities depositories providing banking-type ancillary services

The European Banking Authority (EBA) today launched a public consultation on draft Regulatory Technical Standards (RTS) on the threshold of activity at which Central Securities Depositories (CSDs) providing ‘banking-type ancillary services’, need to meet certain prudential risk management requirements set out in the Central Securities Depositories Regulation (CSDR). The aim of this work is to allow CSDs to do more settlement of foreign currency in commercial bank money without increasing the risk in CSDs or the overall financial system. This consultation runs until 16 June 2025. A public hearing will be held on 13 May.

The EBA is proposing a threshold with staggered requirements dependent on a CSD’s level and type of activity in banking-type ancillary services. This is to ensure that the threshold is risk sensitive and proportionate, without impacting market stability.

The EBA’s analysis included in this consultation paper shows that the maximum level of activity a CSD can provide before having to meet the requirements set out in CSDR is 2.5% of the total value of all securities transactions against cash settled in the books of the CSD over one year. This accounts for up to EUR 6.25 billion per year. Below 1.5% and up to 3.25bn, CSDs would only have to meet basic prudential requirements on credit worthiness, liquidity risk management policy and procedures, and a recovery plan.

Consultation process

Responses to the consultations can be sent to the EBA by clicking on the "send your comments" button on the consultation page.

All contributions received will be published after the consultation closes, unless requested otherwise. The deadline for the submission of comments is 16 June 2025.

A public hearing on this consultation will take place on 13 May 2025 from 10:00 to 12:00 CEST. Deadline for registration is 9 May 2025 at 16:00 CEST.

Legal basis and background

The EBA has developed these draft RTS under Article 59(9 of CSDR, which mandates the Authority to help support further settlement in foreign currencies by CSDs while still ensuring a level playing field in the industry. In particular, the EBA is mandated to set out a threshold at which CSDs providing ‘banking-type ancillary services’ need to meet certain prudential risk management requirements.

Banking-type ancillary services include activities such as providing cash accounts to, and accepting deposits from, participants in a securities settlement system, and payment services involving processing of cash and foreign exchange transactions.