Regulation (EU) No 909/2014 of the European Parliament and of the CouncilShow full title

Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (Text with EEA relevance)

CHAPTER I U.K. Authorisation and supervision of CSDs

Section 1 U.K. Authorities responsible for authorisation and supervision of CSDs

Article 10U.K.Competent authority

F1... A CSD shall be authorised and supervised by the competent authority F2....

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F3Article 11U.K.Designation of the competent authority

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F4Article 12U.K.Relevant authorities

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Article 13U.K.Exchange of information

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2.Competent authorities F6... and other bodies or natural and legal persons receiving confidential information in the exercise of their duties under this Regulation shall use it only in the course of their duties.

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F7Article 14U.K.Cooperation between authorities

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F8Article 15U.K.Emergency situations

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Section 2 U.K. Conditions and procedures for authorisation of CSDs

Article 16U.K.Authorisation of a CSD

1.Any legal person that falls within the definition of CSD shall obtain an authorisation from the competent authority F9... before commencing its activities.

2.The authorisation shall specify the core services listed in Section A of the Annex and non-banking-type ancillary services permitted under Section B of the Annex, which the CSD is authorised to provide.

3.A CSD shall comply at all times with the conditions necessary for authorisation.

4.A CSD as well as its independent auditors, shall, without undue delay, inform the competent authority of any substantive changes affecting the compliance with the conditions for authorisation.

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Article 17U.K.Procedure for granting authorisation

1.The applicant CSD shall submit an application for authorisation to [F10the] competent authority.

2.The application for authorisation shall be accompanied by all information necessary to enable the competent authority to satisfy itself that the applicant CSD has established, at the time of the authorisation, all the necessary arrangements to meet its obligations as laid down in this Regulation. The application for authorisation shall include a programme of operations setting out the types of business envisaged and the structural organisation of the CSD.

3.Within 30 working days from the receipt of the application, the competent authority shall assess whether the application is complete. If the application is not complete, the competent authority shall set a time limit by which the applicant CSD has to provide additional information. The competent authority shall inform the applicant CSD when the application is considered to be complete.

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8.Within six months from the submission of a complete application, the competent authority shall inform the applicant CSD in writing with a fully reasoned decision whether the authorisation has been granted or refused.

9.[F12The Bank of England may make] regulatory technical standards to specify the information that the applicant CSD is to provide to the competent authority in the application for authorisation.

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10.[F14The Bank of England may make] implementing technical standards to establish standard forms, templates and procedures for the application for authorisation.

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Article 18U.K.Effects of the authorisation

1.The activities of the authorised CSD shall be limited to the provision of services covered by its authorisation or by notification in accordance with Article 19(8).

[F162.Securities settlements systems governed by the law applicable within the United Kingdom or any part of the United Kingdom may be operated only by authorised CSDs, the Bank of England (or other public bodies charged with or intervening in the management of public debt in the United Kingdom) acting as a CSD and third-country CSDs that are recognised in accordance with Article 25.]

3.An authorised CSD may have a participation only in a legal person whose activities are limited to the provision of services listed in Sections A and B of the Annex, unless such a participation is approved by its competent authority on the basis that it does not significantly increase the risk profile of the CSD.

4.[F17The Bank of England may make] regulatory technical standards to specify the criteria to be taken into account by the [F18competent authority] to approve the participation of CSDs in legal persons other than those providing the services listed in Sections A and B of the Annex. Such criteria may include whether the services provided by that legal person are complementary to the services provided by a CSD, and the extent of the CSD’s exposure to liabilities arising from such participation.

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Article 19U.K.Extension and outsourcing of activities and services

1.An authorised CSD shall submit an application for authorisation to the competent authority F20... where it wishes to outsource a core service to a third party under Article 30 or extend its activities to one or more of the following:

(a)additional core services listed in Section A of the Annex, not covered by the initial authorisation;

(b)ancillary services permitted under, but not explicitly listed in Section B of the Annex, not covered by the initial authorisation;

(c)the operation of another securities settlement system;

(d)the settlement of all or part of the cash leg of its securities settlement system in the books of another settlement agent;

(e)setting up an interoperable link, including those with third-country CSDs.

2.The granting of authorisation under paragraph 1 shall follow the procedure laid down in Article 17.

The competent authority shall inform the applicant CSD whether the authorisation has been granted or refused within three months of the submission of a complete application.

3.CSDs F21... that intend to establish an interoperable link shall submit an application for authorisation as required under point (e) of paragraph 1, to [F22the competent authority]. F23...

4.The [F24authority] referred to in paragraph 3 shall refuse to authorise a link only where such a CSD link would threaten the smooth and orderly functioning of the financial markets or cause systemic risk.

5.Interoperable links of CSDs that outsource some of their services related to those interoperable links to a public entity in accordance with Article 30(5) and CSD links that are not referred to in point (e) of paragraph 1 shall not be subject to authorisation under that point but shall be notified to the [F25competent authority] prior to their implementation by providing all relevant information that allows [F26the competent authority] to assess compliance with the requirements provided in Article 48.

6.A CSD F27... may maintain or establish a link with a third-country CSD in accordance with the conditions and procedures provided in this Article. Where links are established with a third-country CSD the information provided by the F28... CSD shall allow the competent authority to evaluate whether such links fulfil the requirements provided in Article 48 or the requirements that are equivalent to those provided in Article 48.

7.The competent authority F29... shall require [F30a CSD] to discontinue a CSD link that has been notified when such link does not fulfil the requirements provided for in Article 48 and thereby would threaten the smooth and orderly functioning of the financial markets or cause systemic risk. F31...

8.The additional ancillary services explicitly listed in Section B of the Annex shall not be subject to authorisation, but shall be notified to the competent authority prior to their provision.

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Article 20U.K.Withdrawal of authorisation

1.Without prejudice to any remedial actions or measures under Title V, the competent authority F32... shall withdraw the authorisation in any of the following circumstances, where the CSD:

(a)has not made use of the authorisation during 12 months, expressly renounces the authorisation or has provided no services or performed no activity during the preceding six months;

(b)has obtained the authorisation by making false statements or by any other unlawful means;

(c)no longer complies with the conditions under which authorisation was granted and has not taken the remedial actions requested by the competent authority within a set time-frame;

(d)has seriously or systematically infringed the requirements laid down in this Regulation or, where applicable, [F33in the UK law on markets in financial instruments] or Regulation (EU) No 600/2014.

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4.The competent authority may limit the withdrawal of authorisation to a particular service, activity, or financial instrument.

5.A CSD shall establish, implement and maintain adequate procedures ensuring the timely and orderly settlement and transfer of the assets of clients and participants to another CSD [F35or third-country CSD] in the event of a withdrawal of authorisation referred to in paragraph 1.

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Article 21U.K.CSD register

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3.The name of each CSD [F37or third-country CSD] operating in compliance with this Regulation and to which authorisation or recognition has been granted pursuant to Article 16, 19 or 25 shall be entered in a register specifying the services and, where applicable, classes of financial instruments for which the CSD [F37or third-country CSD] has been authorised. The register shall include F38... CSD links F39.... [F40The competent authority] shall make the register available on its dedicated website and keep it up to date.

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Section 3 U.K. Supervision of CSDs

Article 22U.K.Review and evaluation

1.The competent authority shall, at least on an annual basis, review the arrangements, strategies, processes and mechanisms implemented by a CSD with respect to compliance with this Regulation and evaluate the risks to which the CSD is, or might be, exposed or which it creates for the smooth functioning of securities markets.

2.The competent authority shall require the CSD to submit to the competent authority an adequate recovery plan to ensure continuity of its critical operations.

3.The competent authority shall ensure that an adequate resolution plan is established and maintained for each CSD so as to ensure continuity of at least its core functions, having regard to the size, systemic importance, nature, scale and complexity of the activities of the CSD concerned and any relevant resolution plan established in accordance with [F41the Bank Recovery and Resolution (No.2) Order 2014].

4.The competent authority shall establish the frequency and depth of the review and evaluation referred to in paragraph 1 having regard to the size, systemic importance, nature, scale and complexity of the activities of the CSD concerned. The review and evaluation shall be updated at least on an annual basis.

5.The competent authority shall subject the CSD to on-site inspections.

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9.The competent authority shall require a CSD that does not meet the requirements of this Regulation to take at an early stage the necessary actions or steps to address the situation.

10.[F43The Bank of England may make] regulatory technical standards to specify the following:

(a)the information that the CSD is to provide to the competent authority for the purposes of the review and evaluation referred to in paragraph 1;

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11.[F46The Bank of England may make] implementing technical standards to determine standard forms, templates and procedures for the provision of information referred to in the first subparagraph of paragraph 10.

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Section 4 U.K. Provision of services in another member state

F48Article 23U.K.Freedom to provide services in another Member State

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F49Article 24U.K.Cooperation between authorities of the home Member State and of the host Member State and peer review

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Section 5 U.K. Relations with third countries

Article 25U.K.Third countries

1.Third-country CSDs may provide services referred to in the Annex within the [F50United Kingdom], including through setting up a branch.

[F512.Notwithstanding paragraph 1, a third-country CSD that intends to provide the core services referred to in points (1) and (2) of Section A of the Annex in relation to financial instruments constituted under the law applicable within the United Kingdom or any part of the United Kingdom or to set up a branch in the United Kingdom is subject to the procedure referred to in paragraphs 4 to 11 of this Article.]

3.A CSD F52... may maintain or establish a link with a third-country CSD in accordance with Article 48.

4.After consulting the authorities referred to in paragraph 5, [F53the competent authority] may recognise a third-country CSD that has applied for recognition to provide the services referred to in paragraph 2, where the following conditions are met:

(a)[F54the Treasury has made regulations] in accordance with paragraph 9;

(b)the third-country CSD is subject to effective authorisation, supervision and oversight or, if the securities settlement system is operated by a central bank, oversight, ensuring full compliance with the prudential requirements applicable in that third country;

(c)cooperation arrangements between [F53the competent authority] and the responsible authorities in that third country (‘responsible third-country authorities’) have been established pursuant to paragraph 10;

[F55(d)where relevant, the third-country CSD takes the necessary measures to allow its users to comply with the relevant law applicable within the United Kingdom or any part of the United Kingdom and the adequacy of those measures has been confirmed by the competent authority.]

5.When assessing whether the conditions referred to in paragraph 4 are met, [F56the competent authority] shall consult:

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(c)the responsible third-country authorities entrusted with the authorisation, supervision and oversight of [F58third-country] CSDs.

6.The third-country CSD referred to in paragraph 2 shall submit its application for recognition to [F59the competent authority].

The [F60applicant third-country CSD] shall provide [F59the competent authority] with all information deemed to be necessary for its recognition. Within 30 working days from the receipt of the application, [F59the competent authority] shall assess whether the application is complete. If the application is not complete, [F59the competent authority] shall set a time limit by which the [F60applicant third-country CSD] has to provide additional information.

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The recognition decision shall be based on the criteria laid down in paragraph 4.

Within six months from the submission of a complete application, [F59the competent authority] shall inform the [F60applicant third-country CSD] in writing with a fully reasoned decision whether the recognition has been granted or refused.

[F62Recognition under this Article must be granted only for services listed in the Annex and the decision granting recognition must specify the services which the third-country CSD is recognised to provide or perform.

The applicant third-country CSD must, without undue delay, notify the competent authority of any material changes affecting the condition for recognition in point (b) of paragraph 4.]

[F636A.A third-country CSD recognised under paragraph 4 must, without undue delay, notify the competent authority of any material changes affecting the condition for recognition in point (b) of paragraph 4.]

7.[F64Where the third-country CSD, duly recognised under paragraph 4, provides CSD services in the United Kingdom, the competent authority may request the responsible third country authorities to:]

(a)report periodically on the third-country CSD’s activities in [F65the United Kingdom], including for the purpose of collecting statistics;

(b)communicate, within an appropriate time-frame, the identity of the issuers and participants in the securities settlement systems operated by the third-country CSD which provides services in [F66the United Kingdom] and any other relevant information concerning the activities of that third-country CSD in [F67the United Kingdom].

8.[F68The competent authority] shall, after consulting the authorities referred to in paragraph 5, review the recognition of the third-country CSD in the event of extensions by [F69the third-country CSD] in the [F70United Kingdom] of its services under the procedure laid down in paragraphs 4, 5 and 6.

[F68The competent authority] shall withdraw the recognition of [F69the third-country CSD] where the conditions laid down in paragraph 4 are no longer met, or in the circumstances referred to in Article 20.

[F71The competent authority may—

(a)limit the withdrawal to a particular service; and

(b)direct that the withdrawal is to have effect subject to such transitional arrangements as the competent authority considers necessary or expedient.]

9.[F72The Treasury may by regulations specify a third country which, in the opinion of the Treasury, has legal and supervisory arrangements which ensure that third-country CSDs authorised in that third country comply with legally binding requirements which are in effect equivalent to the requirements laid down in this Regulation, that those third-country CSDs are subject to effective supervision, oversight and enforcement in that third country on an ongoing basis and that the legal framework of that third country provides for an effective equivalent system for the recognition of third-country CSDs authorised under third country legal regimes and CSDs authorised under the law applicable in the United Kingdom.]

In making the determination referred to in the first subparagraph, the [F73Treasury] may also consider whether the legal and supervisory arrangements of a third country reflect the internationally agreed CPSS-IOSCO standards, in so far as the latter do not conflict with the requirements laid down in this Regulation.

10.F74... [F75The competent authority] shall establish cooperation arrangements with the responsible third-country authorities whose legal and supervisory frameworks have been recognised as equivalent to this Regulation in accordance with paragraph 9. Such arrangements shall specify at least:

(a)the mechanism for the exchange of information between [F76the competent authority]F77... and the third-country responsible authorities, including access to all information regarding the [F78third-country] CSDs authorised in third countries that is requested by [F76the competent authority] and in particular access to information in the cases referred to in paragraph 7;

(b)the mechanism for prompt notification of [F79the competent authority] where a third-country responsible authority deems a [F80third-country] CSD that it is supervising to infringe the conditions of its authorisation or of other applicable law;

(c)the procedures concerning the coordination of supervisory activities including, where appropriate, on-site inspections.

Where a cooperation agreement provides for transfers of personal data by a [F81public authority of the United Kingdom], such transfers shall comply with the provisions of [F82data protection legislation]F83... .

11.Where a third-country CSD has been recognised, in accordance with paragraphs 4 to 8, it may provide services referred to in the Annex within the [F84United Kingdom], including by setting up a branch.

12.[F85The Bank of England may make] regulatory technical standards to specify the information that the [F86applicant third-country CSD] is to provide to [F87the competent authority] in its application for recognition under paragraph 6.

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