ESMA is proposing this delay to the entry into force of the RTS on settlement discipline, having taken into account the additional time needed for the establishment of essential features for the functioning of the settlement discipline regime, such as the necessary ISO messages, the joint penalty mechanism of CSDs that use a common settlement infrastructure, and the need for proper testing of the new functionalities.
The CSD Regulation (CSDR) settlement discipline regime consists of three main features:
- rules for the trade allocation and confirmation process,
- cash penalties on failed transactions, and
- mandatory buy-ins.
Following the endorsement of the RTS by the European Commission, the Commission Delegated Regulation will then be subject to the non-objection of the European Parliament and of the Council.