Although it is now more than 10 years since the G20 Summit in Pittsburgh, where policy makers agreed that 帖子-crisis regulation should focus on increasing transparency and mitigating systemic risk in the global financial 市场s, there are still new impacts coming to the 市场place. While most European 帖子-crisis regulation has long been implemented, such as the European Markets Infrastructure Regulation (EMIR) and Markets in Financial Instruments Directive (MiFID II), February 2021 will see the 结算 Disciple Regulation (SDR) come into force, which is the final and most significant phase to impact 帖子 trade of the Central Securities Depository Regulation (CSDR).
The purpose of SDR is to reduce risk by increasing settlement efficiency across European 市场s. The regulation aims to raise settlement rates in Europe from approximately 97.5%到99%以上. This target has not been explicitly stated in the legislation or any of its accompanying documentation, probably because currently there is no official data quantifying settlement rates for the region as a whole. The Central Securities Depositories (CSD) 市场 in Europe is not homogenous and there are over 40 CSDs that use different definitions and methodologies to determine settlement efficiencies. 然而, SDR’s overarching policy objective is for settlement efficiency rates to match those achieved in the U.S. 市场.
With that in mind, how prepared is the global 市场 for the implementation of SDR? Most European firms are aware of the regulation and are getting ready. 然而, 而监管是在欧洲构想出来的, 任何市场参与者都将感受到它的影响, 买方或卖方, 投资欧洲市场的公司, 不管他们住在哪里, 就像MiFID II一样. This means that the extra-territorial reach of the regulation is determined by where the settlement of the stock takes place – if a stock is bought within any EU 28 country and is settled in an EU 28 central securities depository (CSD), 该规定将适用.
This brings communications challenges that are also reminiscent of MiFID II – namely, that there are many US buy-side and smaller sell-side firms that are unaware that they are in scope of SDR. Up until just one day before the MiFID II implementation deadline, thousands of U.S. financial institutions were not aware that they were in scope of the regulation. 进一步, for some buy-side firms that were aware of their compliance obligations, there was an assumption that their broker would manage it on their behalf. That assumption remains false for SDR – firms should not assume that their broker will take care of compliance.
那么，美国将采取何种惩罚措施.S. 尚未为SDR做好准备的公司将面临? For trades which fail to settle under the mandated T+2 timeframe – an earlier component of CSDR which came into force in 2014 – 市场 participants will be liable to pay penalties or charges against each transaction. A penalty will be charged daily based on the asset class/security type and notional value of the transaction, 直到购买过程启动. The buy-in process in itself will present firms with an administrative burden – a mandatory process will be required to take place for any financial instrument which has not been delivered within a specified period of the intended settlement date in order to fulfil settlement. This period will vary depending on the type of security – illiquid assets will need to be brought-in with seven days of the intended settlement date, while more liquid products such as equities and bonds will be required within four days. Small to medium-sized stocks will be subject to a buy-in 15 days after the intended settlement date and while this appears to be more flexible, as these types of transactions are difficult to borrow, 市场 participants could be subject to 15 days of failed trade penalties, 这一结果将被证明代价高昂.
最有效的方法是在美国范围内.S. firms to prepare for SDR and avoid financial penalties and costly buy-ins is to analyze the reasons for failed trades. 通常, failures are the result of manual processing and therefore, 市场 participants should focus on automating the 帖子-trade process and leveraging standardized protocols, 例如使用经过验证的SSI, automated trade confirmation and matching and leveraging additional data sources such as place of settlement and 法律 Entity Identifiers (LEIs) into their 帖子 trade process. Not only will this approach help 市场 participants to reduce failed trades and hence assist in complying with a key component of SDR, implementing best practice back office solutions such as central matching, will create wider benefits such as increasing operational efficiency and risk mitigation.
本文最初发表于 MarketsMedia.