LEIs for CSDR

Overview of the CSDR

The Central Securities Depositories Regulation (CSDR) was first introduced in September 2014. CSDR is a regulation concerned with CSDs (Central Securities Depositories) and securities settlements. As with many current existing regulations, the CSDR was born out of the Global Financial Crisis in 2008. The EU Commission and EU Parliament decided that all financial actors in capital markets should be regulated more consistently.

Also, the Securities Financing Transactions Regulation (SFTR) is a similar regulation that was introduced in 2016 in order to improve the transparency and standardise processes for issuers and buyers in the securities markets in Europe. SFTR makes it a requirement that both parties in a securities transaction must report their LEI to a trade repository.

Other transparency regulations which may apply to CSDs and require the use of an LEI are the SRD regulations. SRD II is being introduced on 3rd September, 2020 and you may be requested as an intermediary to provide identification information including an LEI - SRD II LEI Requirement.

All securities transactions require a set of reporting processes which lead to the settlement of the transaction, i.e the buyer receives the securities in return for the monetary cost. A CSD provides the platform through which the transaction is enabled. Their role is to enable the registration of securities, enable the sale and purchase of securities, keep tabs on records and ownership exchanges.

CSDR applies to CSDs based in, Europe such as Clearstream, Euronext, Euroclear and various national Stock Exchanges.

You can find a full list of CSDs here: ECSDA Members

CSDR standardizes and regulates the settlement of securities and CSDs. The regulation ensures efficiency, security and transparency in cross border settlements within the EU. The CSDR specifically speeds up the rate of the transaction process and can issue penalties in order to encourage successful trading.

CSDR also has strict guidelines and codes of conduct to which CSDs must adhere. This is controlled through a passport system which permits cross border settlements. Ultimately CSDR encourages a level playing field in the international markets and between CSDs.

CSDR LEI requirement Deadline

13th July, 2020

Also, from February 2021, CSDR will impose cash penalties for settlement fails, and also will effect all financial intermediaries trading within the EU.

Since the 2nd April 2018 CSDR requires both counterparties to a transactions to be identified by way of a Legal Entity Identifier (LEI). CSDs are obliged to request participants for their LEI during the transaction process and platform admission requests have been updated to request the LEI upon entry. CSDs issue reports on securities transaction data to their regulators on a quarterly basis and are required to include LEIs in the reporting process.

In line with the “No LEI, No Trade” ruling, if an LEI is missing or ‘Lapsed’ CSDs will be able to take measures such as blocking the transaction.

LEI Worldwide provide a registration portal through which you can quickly, and easily register LEIs for EU entities. The LEI application process takes less than 10 minutes and for EU countries the LEI issuance timeframe is between a few minutes to an hour.

In order to prevent your LEI from lapsing, select auto-renewals at checkout.

If you have any questions or would like to find out more about LEIs and CSDR requirements please contact support at info@lei-worldwide.com

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