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Settlement Discipline Regime (SDR)

The Settlement Discipline Regime helps to improve the safety and efficiency of securities settlement.

The SDR ensures the orderly and timely execution of settlement processes.

It provides a set of measures to prevent and address failures in the settlement of securities transactions.

The SDR measures intend to:

  • prevent settlement fails, with particular reference to the transactions hold & release mechanism
  • track and report settlement fails, including aggregated reporting to the supervising authority
  • manage settlement fails and regulate cash penalties
  • standardise the buy-in procedure

The SDR (except the buy-ins regime) came into force on 1 February 2022. 

Cash penalties

Market participants are liable to pay daily cash penalties for transactions that fail under the intended settlement date.

Euronext Securities has implemented the penalties mechanism in line with the regulatory requirements and in line with the ECSDA framework. Euronext Securities Copenhagen, Euronext Securities Milan, and Euronext Securities Porto, as CSDs participating in the T2S platform, use the T2S penalty mechanism to calculate the cash penalties.

Currencies

Regulatory Technical Standards on Settlement Discipline

The SDR is specified in the Regulatory Technical Standards on Settlement Discipline (RTS). The RTS aims to harmonise the regulatory environment for securities settlement within the EU.

Support

Our CSDs will support stakeholders around their understanding of the regime during implementation. This will ensure timely compliance with the Central Securities Depository Regulation (CSDR) requirements.

Contact our team to learn more: Contacts | euronext.com