Certain financial firms within the United Kingdom will be obliged to report settlement internalisation to the Bank of England from July 2019, the (FCA) announced this Thursday.
According to the today, this will apply to firms that are regulated to perform the following activity:
Under Article 9 of the EU Central Securities Depositories Regulation (CSDR) all firms who meet the above criteria and are considered to be a settlement internaliser – that is, a company that settles transfer orders on behalf of its clients on its own accounts instead of via a Central Securities Depository (CSD), will be obliged to report such activity.
As per the , settlement internalisers are required to report to the relevant competent authority on a quarterly basis from mid next year. This report should hold the aggregated volume and value of all securities transactions that have been settled outside of .
The reports are required to be sent to the Bank of England in London, which is the designated competent authority for the UK, with the first one due by July 12, 2019. This will cover the period from April 2019 until the end of June 2019, the statement says.
Central Securities Depositories Regulation
The CSDR is one of the key regulations that was implemented following the 2008 financial crisis. The main objective of the regulation, as outlined by the European Commission is to “increase the safety and efficiency of securities settlement and settlement infrastructures in the EU”.
To achieve this, the securities and depository regulation has numerous measures in place to improve transparency, as the European Union (EU) has identified CSDs and central counterparties (CCPs) as integral in safeguarding the financial markets.
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