Commission Delegated Regulation (EU) 2017/392Show full title

CHAPTER XIII ACCESS TO A CSD (Articles 33(5), 49(5), 52(3) and 53(4) of Regulation (EU) No 909/2014)

Article 88 Receiving and requesting parties

1. For the purposes of this Chapter, a receiving party shall include one of the following entities:

(a) a receiving CSD as defined in point (5) of Article 2(1) of Regulation (EU) No 909/2014, in respect of paragraphs 1, 4, 9, 13 and 14 of Article 89 and Article 90 of this Regulation;

(b) a CSD which receives a request from a participant, an issuer, a central counterparty (CCP) or a trading venue to have access to its services in accordance with Articles 33(2), 49(2) and 53(1) of Regulation (EU) No 909/2014 in respect of paragraphs 1 to 3, 5 to 8 and 10 to 14 of Article 89 and Article 90 of this Regulation;

(c) a CCP which receives a request from a CSD to have access to its transaction feeds in accordance with Article 53(1) of Regulation (EU) No 909/2014 in respect of Article 90 of this Regulation;

(d) a trading venue which receives a request from a CSD to have access to its transaction feeds in accordance with Article 53(1) of Regulation (EU) No 909/2014 in respect of Article 90 of this Regulation.

2. For the purposes of this Chapter, a requesting party shall include one of the following entities:

(a) a requesting CSD as defined in point (6) of Article 2(1) of Regulation (EU) No 909/2014 in respect of paragraphs 1, 4, 9 and 13 of Article 89 and Article 90 of this Regulation;

(b) a participant, an issuer, a CCP or a trading venue which requests access to the securities settlement system operated by a CSD or to other services provided by a CSD in accordance with Articles 33(2), 49(2) and 53(1) of Regulation (EU) No 909/2014 in respect of paragraphs 1 to 3, 5 to 8 and 10 to 14 of Article 89 and Article 90 of this Regulation;

(c) a CSD which requests access to the transaction feeds of a CCP in accordance with Article 53(1) of Regulation (EU) No 909/2014 in respect of Article 90 of this Regulation;

(d) a CSD which requests access to the transaction feeds of a trading venue in accordance with Article 53(1) of Regulation (EU) No 909/2014 in respect of Article 90 of this Regulation.

SECTION 1 Criteria justifying refusal of access (Articles 33(3), 49(3), 52(2) and 53(3) of Regulation (EU) No 909/2014)

Article 89 Risks to be taken into account by CSDs and competent authorities

1. Where, in accordance with Articles 33(3), 49(3), 52(2) or 53(3) of Regulation (EU) No 909/2014, a CSD carries out a comprehensive risk assessment following a request for access by a requesting participant, an issuer, a requesting CSD, a CCP or a trading venue, as well as where a competent authority assesses the reasons for refusal by the CSD to provide services, they shall take into account the following risks resulting from access to the services of the CSD:

(a) legal risks;

(b) financial risks;

(c) operational risks.

2. When assessing legal risks following a request for access by a requesting participant, a CSD and its competent authority shall take into account the following criteria:

(a) the requesting participant is not able to comply with the legal requirements for participation in the securities settlement system operated by the CSD, or does not provide the CSD with the information necessary for the CSD to assess the compliance, including any required legal opinions or legal arrangements;

(b) the requesting participant is not able to ensure, in accordance with the rules applicable in the home Member State of the CSD, the confidentiality of the information provided through the securities settlement system, or does not provide the CSD with the information necessary for the CSD to assess its ability to comply with those rules on confidentiality, including any required legal opinions or legal arrangements;

(c) where a requesting participant is established in a third country, either of the following:

(i)

the requesting participant is not subject to a regulatory and supervisory framework comparable to the regulatory and supervisory framework that would be applicable to the requesting participant if it were established in the Union;

(ii)

the rules of the CSD concerning settlement finality referred to in Article 39 of Regulation (EU) No 909/2014 are not enforceable in the jurisdiction of the requesting participant.

3. When assessing legal risks following an issuer's request for recording its securities in the CSD in accordance with Article 49(1) of Regulation (EU) No 909/2014, the CSD and its competent authority shall take into account the following criteria:

(a) the issuer is not able to comply with the legal requirements for the provision of services by the CSD;

(b) the issuer is not able to guarantee that the securities have been issued in a manner that enables the CSD to ensure the integrity of the issue in accordance with Article 37 of Regulation (EU) No 909/2014.

4. When assessing legal risks following a request for access by a requesting CSD, the receiving CSD and its competent authority shall take into account the criteria set out in points (a), (b) and (c) of paragraph 2.

5. When assessing legal risks following a request for access by a CCP, a CSD and its competent authority shall take into account the criteria set out in points (a), (b) and (c) of paragraph 2.

6. When assessing legal risks following a request for access by a trading venue, a CSD and its competent authority shall take into account the following criteria:

(a) the criteria set out in point (b) of paragraph 2;

(b) where a trading venue is established in a third country, the requesting trading venue is not subject to a regulatory and supervisory framework comparable to the regulatory and supervisory framework applicable to a trading venue in the Union;

7. When assessing financial risks following a request for access by a requesting participant, a CSD and its competent authority shall take into account whether the requesting participant holds sufficient financial resources to fulfil its contractual obligations towards the CSD.

8. When assessing financial risks following an issuer's request for recording its securities in the CSD in accordance with Article 49(1) of Regulation (EU) No 909/2014, a CSD and its competent authority shall take into account the criterion set out in paragraph 7.

9. When assessing financial risks following a request for access by a requesting CSD, the receiving CSD and its competent authority shall take into account the criterion set out in paragraph 7.

10. When assessing financial risks following a request for access by a CCP or a trading venue, a CSD and its competent authority shall take into account the criterion set out in paragraph 7.

11. When assessing operational risks following a request for access by a requesting participant, a CSD and its competent authority shall take into account the following criteria:

(a) the requesting participant does not have the operational capacity to participate in the CSD;

(b) the requesting participant does not comply with the risk-management rules of the receiving CSD, or it lacks the necessary expertise in that regard;

(c) the requesting participant has not put in place business continuity policies or disaster recovery plans;

(d) the granting of access requires the receiving CSD to undertake significant changes of its operations affecting its risk-management procedures and endangering the smooth functioning of the securities settlement system operated by the receiving CSD, including the implementation of ongoing manual processing by the CSD.

12. When assessing operational risks following an issuer's request for recording its securities in the CSD in accordance with Article 49(1) of Regulation (EU) No 909/2014, a CSD and its competent authority shall take into account the following criteria:

(a) the criterion set out in point (d) of paragraph 11;

(b) the securities settlement system operated by the CSD cannot process the currencies requested by the issuer.

13. When assessing operational risks following a request for access by a requesting CSD, or a CCP, the receiving CSD and its competent authority shall take into account the criteria set out in paragraph 11.

14. When assessing the operational risks following a request for access by a trading venue, the receiving CSD and its competent authority shall take into account at least the criteria set out in point (d) of paragraph 11.

SECTION 2 Procedure for refusal of access (Articles 33(3), 49(4), 52(2) and 53(3) of Regulation (EU) No 909/2014)

Article 90 Procedure

1. In the event of a refusal of access, the requesting party shall have the right to complain within one month from the receipt of the refusal to the competent authority of the receiving CSD, CCP or trading venue that has refused access to it in accordance with Articles 33(3), 49(4), 52(2) or 53(3) of Regulation (EU) No 909/2014.

2. The competent authority referred to in paragraph 1 may request additional information concerning the refusal of access from the requesting and receiving parties.

The responses to the request for information referred to in the first subparagraph shall be sent to the competent authority within two weeks from the date of the receipt of the request.

In accordance with Article 53(3) of Regulation (EU) No 909/2014, within two business days from the date of the receipt of the complaint referred to in paragraph 1, the competent authority of the receiving party shall transmit the complaint to the relevant authority referred to in point (a) of Article 12(1) of Regulation (EU) No 909/2014 from the Member State of the place of establishment of the receiving party.

3. The competent authority referred to in paragraph 1 shall consult the following authorities on its initial assessment of the complaint within two months from the date of the receipt of the complaint, as appropriate:

(a) the competent authority of the place of establishment of the requesting participant in accordance with Article 33(3) of Regulation (EU) No 909/2014;

(b) the competent authority of the place of establishment of the requesting issuer in accordance with Article 49(4) of Regulation (EU) No 909/2014;

(c) the competent authority of the requesting CSD and the relevant authority referred to in point (a) of Article 12(1) of Regulation (EU) No 909/2014 responsible for the oversight of the securities settlement system operated by the requesting CSD in accordance with Articles 52(2) and 53(3) of Regulation (EU) No 909/2014;

(d) the competent authority of the requesting CCP or trading venue in accordance with Article 53(3) of Regulation (EU) No 909/2014 and the relevant authority referred to in point (a) of Article 12(1) of Regulation (EU) No 909/2014 responsible for the oversight of the securities settlement systems in the Member State where the requesting CCP and trading venues are established in accordance with Article 53(3) of Regulation (EU) No 909/2014.

4. The authorities referred to in points (a) to (d) of paragraph 3 shall respond within one month from the date of the request for consultation specified in paragraph 3. Where an authority referred to in points (a) to (d) of paragraph 3 does not provide its opinion within that time limit, it shall be deemed to have a positive opinion on the assessment provided by the competent authority referred to in paragraph 3.

5. The competent authority referred to in paragraph 1 shall inform the authorities referred to in points (a) to (d) of paragraph 3 of its final assessment of the complaint within two weeks from the time limit provided in paragraph 4.

6. Where one of the authorities referred to in points (a) to (d) of paragraph 3 disagrees with the assessment provided by the competent authority referred to in paragraph 1, any of them may refer the matter to ESMA within two weeks from the date when the competent authority referred to in paragraph 1 provides the information concerning its final assessment of the complaint in accordance with paragraph 5.

7. When the matter has not been referred to ESMA, the competent authority referred to in paragraph 1 shall send a reasoned reply to the requesting party within two working days from the time limit provided in paragraph 6.

The competent authority referred to in paragraph 1 shall also inform the receiving party and the authorities referred to in points (a) to (d) of paragraph 3 of the reasoned reply referred to in the first subparagraph of this paragraph within two working days from the date where it sends the reasoned reply to the requesting party.

8. In the event of a referral to ESMA referred to in paragraph 6, the competent authority referred to in paragraph 1 shall inform the requesting party and the receiving party of the referral within two working days from the date where the referral has been made.

9. Where the refusal by the receiving party to grant access to the requesting party is deemed to be unjustified following the procedure provided for in paragraphs 1 to 7, the competent authority referred to in paragraph 1 shall, within two weeks from the time limit specified in paragraph 7, issue an order requiring that receiving party to grant access to the requesting party within three months from the date when the order enters into force.

The time limit referred to in the first subparagraph shall be extended to eight months in case of customised links that require significant development of IT tools, unless otherwise agreed by the requesting and receiving CSDs.

The order shall include the reasons why the competent authority referred to in paragraph 1 concluded that the refusal by the receiving party to grant access was unjustified.

The order shall be sent to ESMA, the authorities referred to in points (a) to (d) of paragraph 3, the requesting party and the receiving party within two working days after the date when it enters into force.

10. The procedure referred to in paragraphs 1 to 9 shall also apply when the receiving party intends to withdraw access to a requesting party to whom it already provides its services.