Central Securities Depository Regulation (CSDR) is one of the most significant regulatory changes in recent years created in the aftermath of the 2008 financial crisis. The regulation is intended to apply uniformly across all European Union CSDs, as well as market operators, in the context of all their market settlement operations. CSDR plays a pivotal role in post trade harmonisation efforts in the EU as it will enhance the legal and operational conditions for cross border settlement by implementing various measures such as cash penalties, mandatory buy-ins.
Although CSDR is a European Union regulation, its impacts will be global and have a knock-on effect throughout the securities value chain, impacting CSD participants and their clients in Asia as well. Market participants need to act now to ensure prompt settlement and to prevent a settlement fail.
The upcoming settlement discipline regime under the CSDR coupled with market initiatives to shorten settlement cycles to T+1 will accelerate the capital market participants to automate the post-trade processes to identify and resolve trade exceptions faster, smarter and increase overall post trade efficiency.