Central Securities Depositories Regulation

What is the European Union Central Securities Depositories Regulation (CSDR)?

The Central Securities Depositories Regulation (CSDR) is a European Union Regulation (EU) No 909/2014, designed to introduce harmonised rules across all Central Securities Depositories (CSDs) within the European Economic Area (EEA) and to complement the Target2Securities (T2S) project. CSDR entered into force in 2014 and the various requirements have been staggered, with implementations to date including the shortening of settlement cycles and internalised settlement reporting.


The current regulatory focus of CSDR is on the new Settlement Discipline Regime (SDR), which came into force on 1 February, 2022, and which seeks to improve the safety and efficiency of settlement in the EEA by introducing measures focused on preventing settlement fails (e.g. timely allocations, partial settlements, continuous real time matching and Real Time Gross Settlement (RTGS)); and on addressing settlement fails (e.g. cash penalties). While mandatory buy-ins are also provided as a measure to address settlement fails, they did not apply from 1 February 2022, and therefore are not covered in this webpage and FAQs (see below).


The UK Government has not adopted the SDR.

CSDR State of Play

The European Commission published proposed amendments to CSDR (CSDR REFIT). Under CSDR REFIT, the European Commission makes a number of changes to the rules applying to mandatory buy-ins, including a provision for mandatory buy-ins to come into effect only if the European Commission puts in place an implementing act when it considers that the penalties regime alone does not improve settlement fails in the EU. In terms of next steps, the legislative proposal needs to follow the ordinary legislative procedure to become binding EU law.

Did the Mandatory Buy-in rules apply from 1 February 2022?

The mandatory buy-in rules did not apply from 1 February 2022. In view of anticipated changes to the SDR (see above) with a focus on the mandatory buy-ins regime, the European Commission, European Parliament and Council agreed the postponement of the mandatory buy-in rules’ effective date. Accordingly, the European Securities and Markets Authority (ESMA) issued a public statement on the supervisory approach on the implementation of the CSDR buy-in provisions, in which it recommends National Competent Authorities (NCAs) not to prioritise supervisory actions in relation to the application of the CSDR buy-in regime until the legislative provision postponing the application of the buy-in regime is formally in place.

What is the Scope of the SDR?

The CSDR Settlement Discipline Regime applies with respect to an in-scope financial instrument settling in an EEA CSD irrespective of the domicile of the counterparty to the transaction. Therefore, both EEA and non-EEA BofA entities and their clients that enter into transactions in those financial instruments will be subject to the SDR (including cash penalties).

What is Bank of America doing to help Counterparties & Clients prepare for the CSDR SDR?

Bank of America is running a comprehensive CSDR programme and has developed the capabilities to successfully manage and report on settlement fails and cash penalties. Please note that no documentation changes are contemplated as a result of these CSDR requirements. We continue to participate in industry groups considering best practices and advocacy, as well as engage with CSDs and sub-custodians to ensure CSDR SDR requirements are understood, tested and successfully deployed.


We would encourage clients to consider the electronic offerings available to send their allocation instructions to Bank of America, to prevent settlement fails. If clients would like to use an electronic offering, please discuss further with your usual Sales or Operations representative.


We have created a “CSDR Settlement Discipline Regime Frequently Asked Questions” document, available here which provides useful information about these changes. This document will be updated with new information periodically as necessary.


We stand ready to help our clients and assist them through any further CSDR related changes that may be required. If you need more information, please contact your Bank of America Relationship Manager.