GERMANY: BaFIN will use ESMA Guidelines on CSDs

Tuesday August 1 2017

The European Securities and Markets Supervisory Authority (ESMA) has issued two guidelines based on CSDR regulations. BaFin will apply these guidelines in supervisory practice.

The first guideline is based on Article 41 CSDR. It governs the procedure in the event that a participant of a CSD fails. This includes possible measures by the central custodian – for example, the blocking of the participant and the provision of financial resources – as well as the communication with the supervisory authorities if one of these measures is applied.

The second guideline is based on Article 53 CSDR. CSD will have access to transaction data of Central counterparties (CCPs) and trading centres. Conversely, CCPs and trading venues can access the data of CSDs. Article 53 (3) of the CSDR provides that access may be refused if it jeopardizes the smooth and orderly functioning of the financial markets or entails  systemic risk. Therefore, the requested party must carry out a risk assessment.

More detailed rules for the risk assessment for the access of the CCP and the trading centres to data of the CSDs can be found in the CSDR Delegate Ordinance. ESMA has in its guidelines, the regulations for the opposite case – that is to access the CSD for transaction data of the CCP adopted and adapted accordingly – and trading centres as well as to be carried out by these risk assessments.

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