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Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 Text with EEA relevance

Type Regulation

Publication 2014-08-28

Last updated 2026-01-17

State In force

Department Council of the European Union, European Parliament

Source EUR-Lex

articles 82

Reform history JSON API

TITLE I SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

Subject matter and scope

This Regulation lays down uniform requirements for the settlement of financial instruments in the Union and rules on the organisation and conduct of central securities depositories (CSDs) to promote safe, efficient and smooth settlement.

This Regulation applies to the settlement of all financial instruments and activities of CSDs unless otherwise specified in this Regulation.

This Regulation is without prejudice to provisions of Union law concerning specific financial instruments, in particular Directive 2003/87/EC.

Articles 10 to 20, 22 to 24 and 27, Article 28(6), Article 30(4) and Articles 46 and 47, the provisions of Title IV and the requirements to report to competent authorities or relevant authorities or to comply with their orders under this Regulation, do not apply to the members of the ESCB, other Member States’ national bodies performing similar functions, or to other public bodies charged with or intervening in the management of public debt in the Union in relation to any CSD which the aforementioned bodies directly manage under the responsibility of the same management body, which has access to the funds of those bodies and which is not a separate entity.

Article 2

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘central securities depository’ or ‘CSD’ means a legal person that operates a securities settlement system referred to in point (3) of Section A of the Annex and provides at least one other core service listed in Section A of the Annex;

(2) ‘third-country CSD’ means any legal entity established in a third country that provides a similar service to the core service referred to in point (3) of Section A of the Annex and performs at least one other core service listed in Section A of the Annex;

(3) ‘immobilisation’ means the act of concentrating the location of physical securities in a CSD in a way that enables subsequent transfers to be made by book entry;

(4) ‘dematerialised form’ means the fact that financial instruments exist only as book entry records;

(5) ‘receiving CSD’ means the CSD which receives the request of another CSD to have access to its services through a CSD link;

(6) ‘requesting CSD’ means the CSD which requests access to the services of another CSD through a CSD link;

(7) ‘settlement’ means the completion of a securities transaction where it is concluded with the aim of discharging the obligations of the parties to that transaction through the transfer of cash or securities, or both;

(8) ‘financial instruments’ or ‘securities’ means financial instruments as defined in point (15) of Article 4(1) of Directive 2014/65/EU;

(9) ‘transfer order’ means transfer order as defined in the second indent of point (i) of Article 2 of Directive 98/26/EC;

(10) ‘securities settlement system’ means a system under the first, second and third indents of point (a) of Article 2 of Directive 98/26/EC that is not operated by a central counterparty whose activity consists of the execution of transfer orders;

(11) ‘settlement internaliser’ means any institution, including one authorised in accordance with Directive 2013/36/EU or with Directive 2014/65/EU, which executes transfer orders on behalf of clients or on its own account other than through a securities settlement system;

(12) ‘intended settlement date’ means the date that is entered into the securities settlement system as the settlement date and on which the parties to a securities transaction agree that settlement is to take place;

(13) ‘settlement period’ means the time period between the trade date and the intended settlement date;

(14) ‘business day’ means business day as defined in point (n) of Article 2 of Directive 98/26/EC;

(15) ‘settlement fail’ means the non-occurrence of settlement, or partial settlement of a securities transaction on the intended settlement date, due to a lack of securities or cash and regardless of the underlying cause;

(16) ‘central counterparty’ or ‘CCP’ means a CCP as defined in point (1) of Article 2 of Regulation (EU) No 648/2012;

(17) ‘competent authority’ means the authority designated by each Member State in accordance with Article 11, unless otherwise specified in this Regulation;

(18) ‘relevant authority’ means any authority referred to in Article 12;

(19) ‘participant’ means any participant, as defined in point (f) of Article 2 of Directive 98/26/EC in a securities settlement system;

(20) ‘participation’ means participation within the meaning of the first sentence of point (2) of Article 2 of Directive 2013/34/EU, or the ownership, direct or indirect, of 20 % or more of the voting rights or capital of an undertaking;

(21) ‘control’ means the relationship between two undertakings as described in Article 22 of Directive 2013/34/EU;

(22) ‘subsidiary’ means a subsidiary undertaking within the meaning of Article 2(10) and Article 22 of Directive 2013/34/EU;

(23) ‘home Member State’ means the Member State in which a CSD is established;

(24) ‘host Member State’ means the Member State, other than the home Member State, in which a CSD has a branch or provides CSD services;

(25) ‘branch’ means a place of business other than the head office which is a part of a CSD, which has no legal personality and which provides CSD services for which the CSD has been authorised;

(26) ‘default’ means, in relation to a participant, a situation where insolvency proceedings, as defined in Article 2, point (j), of Directive 98/26/EC, are opened against a participant or an event defined in the CSD’s internal rules as constituting a default;

(27) ‘delivery versus payment’ or ‘DVP’ means a securities settlement mechanism which links a transfer of securities with a transfer of cash in a way that the delivery of securities occurs if and only if the corresponding transfer of cash occurs and vice versa;

(28) ‘securities account’ means an account on which securities may be credited or debited;

(29) ‘CSD link’ means an arrangement between CSDs whereby one CSD becomes a participant in the securities settlement system of another CSD in order to facilitate the transfer of securities from the participants of the latter CSD to the participants of the former CSD or an arrangement whereby a CSD accesses another CSD indirectly via an intermediary. CSD links include standard links, customised links, indirect links, and interoperable links;

(30) ‘standard link’ means a CSD link whereby a CSD becomes a participant in the securities settlement system of another CSD under the same terms and conditions as applicable to any other participant in the securities settlement system operated by the latter;

(31) ‘customised link’ means a CSD link whereby a CSD that becomes a participant in the securities settlement system of another CSD is provided with additional specific services to the services normally provided by that CSD to participants in the securities settlement system;

(32) ‘indirect link’ means an arrangement between a CSD and a third party other than a CSD, that is a participant in the securities settlement system of another CSD. Such link is set up by a CSD in order to facilitate the transfer of securities to its participants from the participants of another CSD;

(33) ‘interoperable link’ means a CSD link whereby CSDs agree to establish mutual technical solutions for settlement in the securities settlement systems that they operate;

(34) ‘international open communication procedures and standards’ means internationally accepted standards for communication procedures, such as standardised messaging formats and data representation, which are available on a fair, open and non-discriminatory basis to any interested party;

(35) ‘transferable securities’ means transferable securities as defined in point (44) of Article 4(1) of Directive 2014/65/EU;

(36) ‘shares’ means securities specified in point (44)(a) of Article 4(1) of Directive 2014/65/EU;

(37) ‘money-market instruments’ means money-market instruments as defined in point (17) of Article 4(1) of Directive 2014/65/EU;

(38) ‘units in collective investment undertakings’ means units in collective investment undertakings as referred to in point (3) of Section C of Annex I to Directive 2014/65/EU;

(39) ‘emission allowance’ means emission allowance as described in point (11) of Section C of Annex I to Directive 2014/65/EU, excluding derivatives in emission allowances;

(40) ‘regulated market’ means regulated market as defined in point (21) of Article 4(1) of Directive 2014/65/EU;

(41) ‘multilateral trading facility’ or ‘MTF’ means multilateral trading facility as defined in point (22) of Article 4(1) of Directive 2014/65/EU;

(42) ‘trading venue’ means a trading venue as defined in point (24) of Article 4(1) of Directive 2014/65/EU;

(43) ‘settlement agent’ means settlement agent as defined in point (d) of Article 2 of Directive 98/26/EC;

(44) ‘SME growth market’ means an SME growth market as defined in point (12) of Article 4(1) of Directive 2014/65/EU;

(45) ‘management body’ means the body or bodies of a CSD, appointed in accordance with national law, which is empowered to set the CSD’s strategy, objectives and overall direction, and which oversees and monitors management decision-making and includes persons who effectively direct the business of the CSD. Where, according to national law, a management body comprises different bodies with specific functions, the requirements of this Regulation shall apply only to members of the management body to whom the applicable national law assigns the respective responsibility;

(46) ‘senior management’ means those natural persons who exercise executive functions within a CSD and who are responsible and accountable to the management body for the day-to-day management of that CSD;

(47) ‘group’ means a group within the meaning of Article 2, point (11), of Directive 2013/34/EU;

(48) ‘close links’ means close links as defined in Article 4(1), point (35), of Directive 2014/65/EU;

(49) ‘qualifying holding’ means a direct or indirect holding in a CSD which represents at least 10 % of the capital or of the voting rights, as set out in Articles 9, 10 and 11 of Directive 2004/109/EC of the European Parliament and of the Council ([^E0001]), or which makes it possible to exercise a significant influence over the management of the CSD;

(50) ‘deferred net settlement’ means a settlement mechanism whereby cash or securities transfer orders in relation to securities transactions of the participants in the securities settlement system are subject to netting, and whereby settlement of participants’ net claims and obligations takes place at the end of predefined settlement cycles during or at the end of the business day.

The Commission shall be empowered to adopt delegated acts in accordance with Article 67 concerning measures to further specify the non-banking-type ancillary services set out in points (1) to (4) of Section B of the Annex and the banking-type ancillary services set out in Section C of the Annex.

TITLE II SECURITIES SETTLEMENT

CHAPTER I Book-entry form

Article 3

Book-entry form

Without prejudice to paragraph 2, any issuer established in the Union that issues or has issued transferable securities which are admitted to trading or traded on trading venues, shall arrange for such securities to be represented in book-entry form as immobilisation or subsequent to a direct issuance in dematerialised form.

Where a transaction in transferable securities takes place on a trading venue the relevant securities shall be recorded in book-entry form in a CSD on or before the intended settlement date, unless they have already been so recorded.

Where transferable securities are transferred following a financial collateral arrangement as defined in point (a) of Article 2(1) of Directive 2002/47/EC, those securities shall be recorded in book-entry form in a CSD on or before the intended settlement date, unless they have already been so recorded.

Article 4

Enforcement

The authorities of the Member State where the issuer that issues securities is established shall ensure that Article 3(1) is applied.

The authorities competent for the supervision of the trading venues, including the competent authorities designated in accordance with Article 21(1) of Directive 2003/71/EC of the European Parliament and of the Council ([^E0002]), shall ensure that the first subparagraph of Article 3(2) of this Regulation is applied where the securities referred to in Article 3(1) of this Regulation are traded on trading venues.

Member States’ authorities responsible for the application of Directive 2002/47/EC shall ensure that the second subparagraph of Article 3(2) of this Regulation is applied where the securities referred to in Article 3(1) of this Regulation are transferred following a financial collateral arrangement as defined in point (a) of Article 2(1) of Directive 2002/47/EC.

CHAPTER II Settlement periods

Article 5

Intended settlement date

Any participant in a securities settlement system that settles in that system on its own account or on behalf of a third party transactions in transferable securities, money-market instruments, units in collective investment undertakings and emission allowances shall settle such transactions on the intended settlement date.

As regards transactions in transferable securities referred to in paragraph 1 which are executed on trading venues, the intended settlement date shall be no later than on the second business day after the trading takes place. That requirement shall not apply to transactions which are negotiated privately but executed on a trading venue, to transactions which are executed bilaterally but reported to a trading venue or to the first transaction where the transferable securities concerned are subject to initial recording in book-entry form pursuant to Article 3(2).

The competent authorities shall ensure that paragraph 1 is applied.

The authorities competent for the supervision of trading venues shall ensure that paragraph 2 is applied.

CHAPTER III Settlement discipline

Article 6

Measures to prevent settlement fails

Trading venues shall establish procedures that enable the confirmation of relevant details of transactions in financial instruments referred to in Article 5(1) on the date when the transaction has been executed.

Notwithstanding the requirement laid down in paragraph 1, investment firms authorised pursuant to Article 5 of Directive 2014/65/EU shall, where applicable, take measures to limit the number of settlement fails.

Such measures shall at least consist of arrangements between the investment firm and its professional clients as referred to in Annex II to Directive 2014/65/EU to ensure the prompt communication of an allocation of securities to the transaction, confirmation of that allocation and confirmation of the acceptance or rejection of terms in good time before the intended settlement date.

ESMA shall, in close cooperation with the members of the ESCB, issue guidelines in accordance with Article 16 of Regulation (EU) No 1095/2010 on the standardised procedures and messaging protocols to be used for complying with the second subparagraph of this paragraph.

For each securities settlement system it operates, a CSD shall establish procedures that facilitate the settlement of transactions in financial instruments referred to in Article 5(1) on the intended settlement date with a minimum exposure of its participants to counterparty and liquidity risks and a low rate of settlement fails. It shall promote early settlement on the intended settlement date through appropriate mechanisms.

For each securities settlement system it operates, a CSD shall put in place measures to encourage and incentivise the timely settlement of transactions by its participants. CSDs shall require participants to settle their transactions on the intended settlement date.

ESMA shall, in close cooperation with the members of the ESCB, develop draft regulatory technical standards to specify the measures to prevent settlement fails in order to increase settlement efficiency and in particular:

(a) the measures to be taken by investment firms in accordance with paragraph 2, first subparagraph;

(b) the details of the procedures that facilitate settlement referred to in paragraph 3, which could include the shaping of transaction sizes, partial settlement of failing trades and the use of auto-lend/borrow programmes provided by certain CSDs; and

(c) the details of the measures to encourage and incentivise the timely settlement of transactions referred to in paragraph 4.

ESMA shall submit those draft regulatory technical standards to the Commission by 17 July 2025.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 7

Measures to address settlement fails

For each securities settlement system it operates, a CSD shall establish a system that monitors settlement fails of transactions in financial instruments referred to in Article 5(1). The CSD shall provide regular reports to the competent authority and relevant authorities as to the number and details of settlement fails and any other relevant information, including the measures envisaged by the CSD and its participants to improve settlement efficiency. Those reports shall be made public by the CSD in an aggregated and anonymised form on an annual basis. The competent authorities shall share with ESMA any relevant information on settlement fails.

For each securities settlement system it operates, a CSD shall establish procedures that facilitate the settlement of transactions in financial instruments referred to in Article 5(1) that are not settled on the intended settlement date. Those procedures shall provide for a penalty mechanism that serves as an effective deterrent to participants that cause settlement fails.

Before establishing the procedures referred to in the first subparagraph, a CSD shall consult the relevant trading venues and CCPs in respect of which it provides settlement services.

The penalty mechanism referred to in the first subparagraph shall include cash penalties for participants that cause settlement fails (‘failing participants’). Cash penalties shall be calculated on a daily basis for each business day that a transaction fails to be settled after its intended settlement date until the transaction is either settled or bilaterally cancelled. The cash penalties shall not be configured as a revenue source for the CSD.

The penalty mechanism referred to in paragraph 2 shall not apply to:

(a) settlement fails the underlying cause of which is not attributable to the participants in the transaction;

(b) operations that are not considered as trading;

(c) transactions where the failing participant is a CCP, except for transactions entered into by a CCP where it does not interpose itself between the counterparties; or

(d) transactions where insolvency proceedings are opened against the failing participant.

A CCP may establish in its rules a mechanism to cover losses that it could incur resulting from the application of paragraph 2, third subparagraph.

The Commission shall be empowered to adopt delegated acts in accordance with Article 67 to supplement this Regulation by specifying parameters for the calculation of a deterrent and proportionate level of the cash penalties referred to in paragraph 2, third subparagraph, of this Article based on all of the following:

(a) asset type;

(b) liquidity of the financial instrument;

(d) duration of the settlement fail.

When specifying the parameters referred to in the first subparagraph, the Commission shall take into account the level of settlement fails per class of financial instruments and the effect that low or negative interest rates could have on the incentives of counterparties and on settlement fails. The parameters used for the calculation of cash penalties shall ensure a high degree of settlement discipline and the smooth and orderly functioning of the financial markets concerned.

The Commission shall review the parameters for the calculation of the level of the cash penalties on a regular basis and at least every four years in order to reassess the appropriateness and effectiveness of the cash penalties in achieving a level of settlement fails in the Union deemed to be acceptable having regard to the impact on the financial stability of the Union.

By 17 January 2026, ESMA shall publish and keep updated on its website a list of the financial instruments referred to in Article 5(1) which are admitted to trading or traded on a trading venue or cleared by a CCP.

CSDs, CCPs and trading venues shall establish procedures that enable them to suspend, in consultation with their respective competent authorities, any participant that fails consistently and systematically to deliver the financial instruments referred to in Article 5(1) on the intended settlement date and to disclose to the public its identity only after giving that participant the opportunity to submit its observations and provided that the competent authorities of the CSDs, CCPs and trading venues, and of that participant have been duly informed. In addition to consulting before any suspension, CSDs, CCPs and trading venues shall notify, without delay, the respective competent authorities of the suspension of a participant. The competent authority shall immediately inform the relevant authorities of the suspension of a participant.

Public disclosure of suspensions shall not contain personal data as defined in Article 4, point (1), of Regulation (EU) 2016/679 of the European Parliament and of the Council ([^E0003]).

This paragraph shall not apply to failing participants which are CCPs or in cases where insolvency proceedings are opened against the failing participant.

This Article shall not apply where the principal venue for the trading of shares is located in a third country. The location of the principal venue for the trading of shares shall be determined in accordance with Article 16 of Regulation (EU) No 236/2012.

The Commission shall be empowered to adopt delegated acts in accordance with Article 67 to supplement this Regulation by specifying:

(a) the underlying causes of settlement fails that are considered as not attributable to the participants in the transaction under paragraph 3, point (a), of this Article; and

(b) the circumstances in which operations are not considered as trading under paragraph 3, point (b), of this Article.

10.

ESMA shall, in close cooperation with the members of the ESCB, develop draft regulatory technical standards to specify:

(a) the details of the system monitoring settlement fails and the reports on settlement fails referred to in paragraph 1;

(b) the processes for collection and redistribution of cash penalties and any other possible proceeds from such penalties in accordance with paragraph 2;

(c) the conditions under which a participant is deemed to fail, consistently and systematically, to deliver the financial instruments as referred to in paragraph 7.

ESMA shall submit those draft regulatory technical standards to the Commission by 17 January 2025.

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 7a

Mandatory buy-in process

Without prejudice to the penalty mechanism referred to in Article 7(2) and the right to bilaterally cancel the transaction, after consulting the European Systemic Risk Board and based on the cost-benefit analysis provided by ESMA pursuant to Article 74(4), the Commission may, by means of an implementing act, decide to which of the financial instruments referred to in Article 5(1), or categories of transactions in those financial instruments, the mandatory buy-in process referred to in paragraphs 4 to 10 of this Article is to be applied where the Commission considers that mandatory buy-ins constitute a necessary, appropriate and proportionate means to address the level of settlement fails in the Union.

The Commission may adopt the implementing act referred to in the first subparagraph only if both of the following conditions are met:

(a) the application of the penalty mechanism referred to in Article 7(2) has not resulted in a long-term sustainable reduction of settlement fails in the Union or in maintaining a reduced level of settlement fails in the Union, even after a review of the level of cash penalties in accordance with Article 7(5), second subparagraph;

(b) the level of settlement fails in the Union has or is likely to have a negative effect on the financial stability of the Union.

For the purposes of reaching the decision referred to in the first subparagraph, the Commission shall take into account all of the following:

(a) the potential impact of the mandatory buy-in process on financial markets in the Union;

(b) the number, volume and duration of settlement fails, including the number and volume of settlement fails outstanding at the end of the extension period referred to in paragraph 4;

(c) whether a particular financial instrument or category of transactions in that financial instrument is already subject to appropriate contractual provisions that provide a right for receiving participants to trigger a buy-in.

The implementing act shall be adopted in accordance with the examination procedure referred to in Article 68(2). It shall specify a date of application that is not earlier than one year after its entry into force.

ESMA shall publish and keep updated on its website a list of the financial instruments determined by the implementing act referred to in paragraph 1.

Before adopting the implementing act referred to in paragraph 1, the Commission shall:

(a) assess the effectiveness and proportionality of the penalty mechanism referred to in Article 7(2) and, where appropriate, change the structure or severity of the penalty mechanism in order to increase settlement efficiency in the Union;

(b) consider whether the conditions referred to in paragraph 1 are met, despite the prior application of the penalty mechanism referred to in Article 7(2) and the rationale for, and potential cost implications of, subjecting specific financial instruments and categories of transactions to mandatory buy-ins.

Without prejudice to the right to bilaterally cancel the transaction, where the Commission has adopted an implementing act pursuant to paragraph 1 and where a failing participant has not delivered the financial instruments covered by that implementing act to the receiving participant within a period after the intended settlement date (‘extension period’) of five business days, a mandatory buy-in process shall be initiated.

By way of derogation from the first subparagraph, based on the asset type and liquidity of the financial instruments concerned, the extension period may be increased to a maximum of seven business days where a shorter extension period would affect the smooth and orderly functioning of the markets concerned.

By way of derogation from the first and second subparagraphs, where the transaction relates to a financial instrument traded on an SME growth market, the extension period shall be 15 business days unless the SME growth market decides to apply a shorter period.

The instruments subject to the mandatory buy-in process shall be available for settlement and delivered to the receiving participant within an appropriate timeframe.

Where there is a settlement fail in a chain of transactions resulting in settlement fails of subsequent transactions in the chain, each participant shall have the right to pass on their obligation to initiate the mandatory buy-in to the next participant in the chain.

The intermediate receiving participant shall be considered as complying with the obligation to execute a mandatory buy-in against the failing participant where it passes on its obligation in accordance with the first subparagraph. The intermediate receiving participant may also pass on to the failing participant its obligations towards the end receiving participant pursuant to paragraphs 8, 9 and 10.

The relevant CSD shall be informed about how the failed transaction was resolved throughout the chain of transactions.

The mandatory buy-in process referred to in paragraph 4 shall not apply to:

(a) the settlement fails, operations and transactions listed in Article 7(3);

(b) securities financing transactions;

(d) transactions that fall within the scope of Article 15 of Regulation (EU) No 236/2012.

Without prejudice to the penalty mechanism referred to in Article 7(2), where the price of the financial instruments agreed at the time of the trade is different from the price paid for the execution of the buy-in, the difference shall be paid by the participant benefitting from the price difference to the other participant no later than on the second business day after the financial instruments have been delivered following the buy-in.

If the buy-in fails or is not possible, the receiving participant may choose either to be paid cash compensation or to defer the execution of the buy-in to an appropriate later date (‘deferral period’). If the relevant financial instruments are not delivered to the receiving participant by the end of the deferral period, cash compensation shall be paid to the receiving participant.

Cash compensation shall be paid no later than on the second business day after the end of either the mandatory buy-in process referred to in paragraph 4 or, in cases where the receiving participant chooses to defer the execution of the buy-in, the deferral period.

10.

The failing participant shall reimburse the entity that executes the buy-in for all amounts paid in connection with the mandatory buy-in process initiated pursuant to paragraph 4, first subparagraph, including any execution fees resulting from the buy-in. Such fees shall be clearly disclosed to the participants.

11.

Paragraphs 4 to 10 shall apply to all transactions of the financial instruments referred to in Article 5(1) which are admitted to trading or traded on a trading venue or cleared by a CCP as follows:

(a) for transactions cleared by a CCP, the CCP shall be the entity that executes the buy-in according to paragraphs 4 to 10;

(b) for transactions not cleared by a CCP, but executed on a trading venue, the trading venue shall include in its internal rules an obligation for its members and its participants to apply the measures referred to in paragraphs 4 to 10;

(c) for all transactions other than those referred to in points (a) and (b) of this subparagraph, CSDs shall include in their internal rules an obligation for their participants to be subject to the measures referred to in paragraphs 4 to 10.

A CSD shall provide the necessary settlement information to CCPs and trading venues to enable them to fulfil their obligations under this paragraph.

Without prejudice to points (a), (b) and (c) of the first subparagraph, CSDs may monitor the execution of buy-ins as referred to in those points with respect to multiple settlement instructions, on the same financial instruments and with the same date of expiry of the execution period, with the aim of minimising the number of buy-ins to be executed and thus the impact on the prices of the relevant financial instruments.

12.

13.

ESMA may recommend that the Commission suspend in a proportionate way the buy-in mechanism referred to in paragraphs 4 to 10 for specific categories of financial instruments where necessary to avoid or address a serious threat to financial stability or to the orderly functioning of financial markets in the Union. Such recommendation shall be accompanied by a fully reasoned assessment of its necessity and shall not be made public.

Before making the recommendation referred to in the first subparagraph, ESMA shall consult the members of the ESCB and the European Systemic Risk Board.

The Commission shall, without undue delay after receipt of the recommendation, on the basis of the reasons and evidence provided by ESMA, either suspend the mandatory buy-in mechanism referred to in paragraphs 4 to 10 for the specific categories of financial instruments by means of an implementing act, or reject the recommended suspension. Where the Commission rejects the recommended suspension, it shall provide the reasons therefor in writing to ESMA. Such information shall not be made public.

The implementing act referred to in the third subparagraph shall be adopted in accordance with the procedure referred to in Article 68(3).

The suspension of the mandatory buy-in mechanism shall be communicated to ESMA and shall be published in the Official Journal of the European Union and on the Commission’s website.

The suspension of the mandatory buy-in mechanism shall be valid for an initial period of no more than six months from the date of application of that suspension.

Where the grounds for the suspension continue to apply, the Commission may, by way of an implementing act, extend the suspension for additional periods of no more than three months each, with the total period of the suspension not exceeding 12 months. Any extensions of the suspension shall be published in accordance with the fifth subparagraph.

The implementing act referred to in the seventh subparagraph shall be adopted in accordance with the procedure referred to in Article 68(3). ESMA shall, in sufficient time before the end of the suspension referred to in the sixth subparagraph or of the extension referred to in the seventh subparagraph, issue an opinion to the Commission on whether the grounds for the suspension continue to apply.

14.

Where the Commission has adopted an implementing act in accordance with paragraph 1, it shall review that decision on a regular basis and at least every four years in order to assess whether the conditions set out in that paragraph remain fulfilled.

Where the Commission considers that mandatory buy-ins are no longer justified or do not address settlement fails in the Union and are no longer necessary, appropriate or proportionate, it shall, without delay, adopt implementing acts amending or repealing the implementing act referred to in paragraph 1.

The implementing act referred to in the second subparagraph shall be adopted in accordance with the examination procedure referred to in Article 68(2).

Where ESMA considers that mandatory buy-ins are no longer justified or do not address settlement fails in the Union and are no longer necessary, appropriate or proportionate, it may recommend that the Commission amend or repeal the implementing act referred to in paragraph 1. Paragraph 13, first to fourth subparagraphs, shall apply mutatis mutandis.

15.

ESMA shall, in close cooperation with the members of the ESCB, develop draft regulatory technical standards to further specify:

(a) the details of the operation of the appropriate buy-in process referred to in paragraphs 4 to 10, including appropriate timeframes, calibrated taking into account the asset type and liquidity of the financial instruments, for the delivery of the financial instrument following the buy-in process;

(b) the circumstances under which the extension period could be prolonged according to asset type and liquidity of the financial instruments, in accordance with the conditions referred to in paragraph 4, second subparagraph, taking into account the criteria for assessing liquidity under Article 2(1), point (17), of Regulation (EU) No 600/2014;

(d) other types of transactions that render the buy-in process unnecessary as referred to in paragraph 7, point (c), such as financial collateral arrangements or transactions that include close-out netting provisions;

(e) a methodology for the calculation of the cash compensation referred to in paragraph 9;

(f) the necessary settlement information referred to in paragraph 11, second subparagraph; and

(g) the details of how the participants of the CSDs, the CCPs and the trading venue members are to take into account the specificities of retail investors when executing the mandatory buy-in in accordance with paragraph 11.

ESMA shall submit those draft regulatory technical standards to the Commission by 17 January 2025.

Article 8

Enforcement

The competent authority of the CSD that operates the securities settlement system, the relevant authority responsible for the oversight of the securities settlement system concerned as well as the competent authorities for the supervision of trading venues, investment firms and CCPs shall be competent for ensuring that Articles 6 and 7 are applied by the institutions subject to their supervision and for monitoring the penalties imposed. Where necessary, the respective competent authorities shall cooperate closely. Member States shall inform ESMA about the designated competent authorities that are part of the supervision structure at the national level.

In order to ensure consistent, efficient and effective supervisory practices within the Union in relation to Articles 6 and 7 of this Regulation, ESMA may, in close cooperation with the members of the ESCB, issue guidelines in accordance with Article 16 of Regulation (EU) No 1095/2010.

An infringement of the rules under this Title shall not affect the validity of a private contract on financial instruments or the possibility for the parties to enforce the provisions of a private contract on financial instruments.

CHAPTER IV Internalised settlement

Article 9

Settlement internalisers

Settlement internalisers shall report to the competent authorities of their place of establishment on a quarterly basis the aggregated volume and value of all securities transactions that they settle outside securities settlement systems.

Competent authorities shall without delay transmit the information received under the first subparagraph to ESMA and shall inform ESMA of any potential risk resulting from that settlement activity.

ESMA may, in close cooperation with the members of the ESCB, develop draft regulatory technical standards further specifying the content of such reporting.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

ESMA shall develop draft implementing technical standards to establish standard forms, templates and procedures for the reporting and transmission of information referred to in paragraph 1.

ESMA shall submit those draft implementing technical standards to the Commission by 18 June 2015.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

TITLE III CENTRAL SECURITIES DEPOSITORIES

CHAPTER I Authorisation and supervision of CSDs

Section 1 Authorities responsible for authorisation and supervision of CSDs

Article 10

Competent authority

Without prejudice to the oversight by the members of the ESCB referred to in Article 12(1), a CSD shall be authorised and supervised by the competent authority of its home Member State.

Article 11

Designation of the competent authority

Each Member State shall designate the competent authority responsible for carrying out the duties under this Regulation for the authorisation and supervision of CSDs established in its territory and shall inform ESMA thereof.

Where a Member State designates more than one competent authority, it shall determine their respective roles and shall designate a single authority to be responsible for cooperation with other Member States’ competent authorities, the relevant authorities, ESMA, and EBA, where specifically referred to in this Regulation.

ESMA shall publish on its website a list of the competent authorities designated in accordance with paragraph 1.

The competent authorities shall have the supervisory and investigatory powers necessary for the exercise of their functions.

Article 12

Relevant authorities

The following authorities shall be involved in the authorisation and supervision of CSDs where specifically referred to in this Regulation:

(a) the authority responsible for the oversight of the securities settlement system operated by the CSD in the Member State whose law applies to that securities settlement system;

(b) the central banks in the Union issuing the most relevant currencies in which settlement takes or will take place;

(c) where relevant, the central bank in the Union in whose books the cash payments of a securities settlement system operated by the CSD is or will be settled.

ESMA shall publish on its website the list of the relevant authorities referred to in paragraph 1.

ESMA shall, in close cooperation with the members of the ESCB, develop draft regulatory technical standards specifying the conditions under which the Union currencies referred to in point (b) of paragraph 1 are considered to be the most relevant, and efficient practical arrangements for the consultation of the relevant authorities referred to in points (b) and (c) of that paragraph.

ESMA shall submit those draft regulatory technical standards to the Commission by 18 June 2015.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 13

Exchange of information

Competent authorities, relevant authorities and ESMA shall, on request and without undue delay, provide one another with the information required for the purposes of carrying out their duties under this Regulation.

Competent authorities, relevant authorities, ESMA and other bodies or natural and legal persons receiving confidential information in the exercise of their duties under this Regulation shall use it only in the course of their duties.

Article 14

Cooperation between authorities

Competent authorities, relevant authorities and ESMA shall cooperate closely, including by exchanging all relevant information for the application of this Regulation. Where appropriate and relevant, such cooperation shall include other public authorities and bodies, in particular those established or appointed under Directive 2003/87/EC.

In order to ensure consistent, efficient and effective supervisory practices within the Union, including cooperation between competent authorities and relevant authorities in the different assessments necessary for the application of this Regulation, ESMA may, in close cooperation with the members of the ESCB, issue guidelines addressed to competent authorities in accordance with Article 16 of Regulation (EU) No 1095/2010.

The competent authorities shall, in the exercise of their general duties, duly consider the potential impact of their decisions on the stability of the financial system in all other Member States concerned, in particular in the emergency situations referred to in Article 15, based on the available information.

Article 15

Emergency situations

Without prejudice to the notification procedure provided for in Article 6(3) of Directive 98/26/EC, competent authorities and relevant authorities shall immediately inform ESMA, the European Systemic Risk Board established by Regulation (EU) No 1092/2010 of the European Parliament and of the Council ([^E0004]) and each other of any emergency situation relating to a CSD, including of any developments in financial markets, which may have an adverse effect on market liquidity, the stability of a currency in which settlement takes place, the integrity of monetary policy or on the stability of the financial system in any of the Member States where the CSD or one of its participants are established.

Section 2 Conditions and procedures for authorisation of CSDs

Article 16

Authorisation of a CSD

Any legal person that falls within the definition of CSD shall obtain an authorisation from the competent authority of the Member State where it is established before commencing its activities.

The authorisation shall specify the core services listed in Section A of the Annex and non-banking-type ancillary services permitted under Section B of the Annex, which the CSD is authorised to provide.

A CSD shall comply at all times with the conditions necessary for authorisation.

A CSD as well as its independent auditors, shall, without undue delay, inform the competent authority of any substantive changes affecting the compliance with the conditions for authorisation.

Article 17

Procedure for granting authorisation

The applicant CSD shall submit an application for authorisation to its competent authority.

The application for authorisation shall be accompanied by all information necessary to enable the competent authority to satisfy itself that the applicant CSD has established, at the time of the authorisation, all the necessary arrangements to meet its obligations as laid down in this Regulation. The application for authorisation shall include a programme of operations setting out the types of business envisaged and the structural organisation of the CSD.

By way of derogation from the first subparagraph, where an applicant CSD does not comply with all requirements of this Regulation, but where it can reasonably be assumed that it will do so when it commences its activities, the competent authority may grant the authorisation subject to the condition that the applicant CSD has all the necessary arrangements in place to comply with the requirements of this Regulation when it commences its activities.

Within 30 working days from the receipt of the application, the competent authority shall assess whether the application is complete. If the application is not complete, the competent authority shall set a time limit by which the applicant CSD has to provide additional information. The competent authority shall inform the applicant CSD when the application is considered to be complete.

From the moment when the application is considered to be complete, the competent authority shall transmit all information included in the application to the relevant authorities and consult those authorities concerning the features of the securities settlement system operated by the applicant CSD.

Each relevant authority may issue a reasoned opinion within its areas of competence to the competent authority within three months of receipt of the information by the relevant authority. Where a relevant authority does not provide an opinion within that timeframe it shall be deemed to have issued a positive opinion.

Where at least one of the relevant authorities issues a negative reasoned opinion, and the competent authority nevertheless intends to grant the authorisation, that competent authority shall, within one month of receipt of the negative opinion, provide the relevant authorities with the reasons why it intends to grant the authorisation notwithstanding the negative opinion.

Any of the relevant authorities that issued a negative opinion referred to in the third subparagraph may refer the matter to ESMA for assistance under Article 31(2), point (c), of Regulation (EU) No 1095/2010.

Where the issue is not settled within one month of the referral to ESMA, the competent authority intending to grant the authorisation shall take a final decision and provide the relevant authorities with a detailed explanation of its decision in writing.

Where the competent authority intends to refuse authorisation, the matter shall not be referred to ESMA.

A negative opinion referred to in the third subparagraph shall state in writing the full and detailed reasons why the requirements laid down in this Regulation or other requirements of Union law are not met.

Where the applicant CSD intends to provide services referred to in point (2) of Article 4(1) of Directive 2014/65/EU in addition to the provision of non-banking-type ancillary services explicitly listed in Section B of the Annex, the competent authority shall transmit all information included in the application to the authority referred to in Article 67 of Directive 2014/65/EU and consult that authority on the ability of the applicant CSD to comply with the requirements of Directive 2014/65/EU and of Regulation (EU) No 600/2014.

The competent authority shall, before granting authorisation to the applicant CSD, consult the competent authorities of the other Member State involved in the following cases:

(a) the CSD is a subsidiary of a CSD authorised in another Member State;

(b) the CSD is a subsidiary of the parent undertaking of a CSD authorised in another Member State;

(c) the CSD is controlled by the same natural or legal persons who control a different CSD authorised in another Member State.

The consultation referred to in paragraph 6 shall cover the following:

(a) the suitability of the shareholders and persons referred to in Article 27(6) and the reputation and experience of the persons who effectively direct the business of the CSD referred to in Article 27(1) and (4), where those shareholders and persons are common to the CSD and to a CSD authorised in another Member State;

(b) whether the relations referred to in points (a), (b) and (c) of paragraph 6 between the CSD authorised in another Member State and the applicant CSD do not affect the ability of the latter to comply with the requirements of this Regulation.

7a. In addition to consulting the competent authorities referred to in paragraph 6, the competent authority may, before granting authorisation to the applicant CSD, consult other authorities supervising an entity that has a qualifying holding in the applicant CSD on the matters referred to in paragraph 7.

Within six months from the submission of a complete application, the competent authority shall inform the applicant CSD in writing with a fully reasoned decision whether the authorisation has been granted or refused.

8a. The competent authority shall, without undue delay, inform the authorities consulted pursuant to paragraphs 4 to 7a of the results of the authorisation process, including any remedial actions.

ESMA shall, in close cooperation with the members of the ESCB, develop draft regulatory technical standards to specify the information that the applicant CSD is to provide to the competent authority in the application for authorisation.

ESMA shall submit those draft regulatory technical standards to the Commission by 18 June 2015.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

10.

ESMA shall, in close cooperation with the members of the ESCB, develop draft implementing technical standards to establish standard forms, templates and procedures for the application for authorisation.

ESMA shall submit those draft implementing technical standards to the Commission by 18 June 2015.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

Article 18

Effects of the authorisation

The activities of the authorised CSD shall be limited to the provision of services covered by its authorisation or by notification in accordance with Article 19(8).

Securities settlement systems may be operated only by authorised CSDs, including central banks acting as CSDs.

An authorised CSD may have a participation only in a legal person whose activities are limited to the provision of services listed in Sections A and B of the Annex, unless such a participation is approved by its competent authority on the basis that it does not significantly increase the risk profile of the CSD.

ESMA shall, in close cooperation with the members of the ESCB, develop draft regulatory technical standards to specify the criteria to be taken into account by the competent authorities to approve the participation of CSDs in legal persons other than those providing the services listed in Sections A and B of the Annex. Such criteria may include whether the services provided by that legal person are complementary to the services provided by a CSD, and the extent of the CSD’s exposure to liabilities arising from such participation.

ESMA shall submit those draft regulatory technical standards to the Commission by 18 June 2015.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 19

Extension and outsourcing of activities and services

An authorised CSD shall submit an application for authorisation to the competent authority of its home Member State where it wishes to outsource a core service to a third party under Article 30 or extend its activities to one or more of the following:

(a) additional core services listed in Section A of the Annex, not covered by the initial authorisation;

(b) ancillary services permitted under, but not explicitly listed in Section B of the Annex, not covered by the initial authorisation;

(d) the settlement of all or part of the cash leg of its securities settlement system in the books of another settlement agent;

(e) setting up an interoperable link, including those with third-country CSDs.

The granting of an authorisation to outsource a core service to a third party pursuant to paragraph 1 or to extend activities pursuant to paragraph 1, points (a), (c) and (d), shall follow the procedure laid down in Article 17.

The granting of an authorisation under paragraph 1, point (b), shall follow the procedure laid down in Article 17(1), (2), (3), (5) and (8a).

The granting of an authorisation under paragraph 1, point (e), shall follow the procedure laid down in Article 17(1), (2) and (3).

The competent authority shall inform the applicant CSD whether the authorisation has been granted or refused within three months of submission of a complete application.

CSDs established in the Union that intend to establish an interoperable link shall submit an application for authorisation as required under point (e) of paragraph 1, to their respective competent authorities. Those authorities shall consult each other regarding the approval of the CSD link. In the event of divergent decisions and if agreed by both competent authorities the matter may be referred to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.

The authorities referred to in paragraph 3 shall refuse to authorise a link only where such a CSD link would threaten the smooth and orderly functioning of the financial markets or cause systemic risk.

Interoperable links of CSDs that outsource some of their services related to those interoperable links to a public entity in accordance with Article 30(5) and CSD links that are not referred to in point (e) of paragraph 1 shall not be subject to authorisation under that point but shall be notified to the CSDs’ competent and relevant authorities prior to their implementation by providing all relevant information that allows such authorities to assess compliance with the requirements provided in Article 48.

A CSD established and authorised in the Union may maintain or establish a link with a third-country CSD in accordance with the conditions and procedures provided in this Article. Where links are established with a third-country CSD the information provided by the requesting CSD shall allow the competent authority to evaluate whether such links fulfil the requirements provided in Article 48 or the requirements that are equivalent to those provided in Article 48.

The competent authority of the requesting CSD shall require that CSD to discontinue a CSD link that has been notified when such link does not fulfil the requirements provided for in Article 48 and thereby would threaten the smooth and orderly functioning of the financial markets or cause systemic risk. Where a competent authority requires the CSD to discontinue a CSD link, it shall follow the procedure laid down in Article 20(2) and (3).

The additional ancillary services explicitly listed in Section B of the Annex shall not be subject to authorisation, but shall be notified to the competent authority prior to their provision.

Article 20

Withdrawal of authorisation

Without prejudice to any remedial actions or measures under Title V, the competent authority of the home Member State shall withdraw the authorisation in any of the following circumstances, where the CSD:

(a) has not made use of the authorisation during 12 months, expressly renounces the authorisation or has provided no services or performed no activity during the preceding six months;

(b) has obtained the authorisation by making false statements or by any other unlawful means;

(c) no longer complies with the conditions under which authorisation was granted and has not taken the remedial actions requested by the competent authority within a set time-frame;

(d) has seriously or systematically infringed the requirements laid down in this Regulation or, where applicable, in Directive 2014/65/EU or Regulation (EU) No 600/2014.

From the moment when it becomes aware of one of the circumstances referred to in paragraph 1, the competent authority shall immediately consult the relevant authorities and, where applicable, the authority referred to in Article 67 of Directive 2014/65/EU on the necessity to withdraw the authorisation.

ESMA and any relevant authority and, where applicable, the authority referred to in Article 67 of Directive 2014/65/EU may, at any time, request that the competent authority of the home Member State examines whether the CSD still complies with the conditions under which the authorisation was granted.

The competent authority may limit the withdrawal of authorisation to a particular service, activity, or financial instrument.

A CSD shall establish, implement and maintain adequate procedures ensuring the timely and orderly settlement and transfer of the assets of clients and participants to another CSD in the event of a withdrawal of authorisation referred to in paragraph 1. Such procedures shall include the transfer of issuance accounts or similar records evidencing the issuance of securities, and records linked to the provision of the core services referred to in Section A, points 1 and 2, of the Annex.

Article 21

CSD register

Decisions taken by competent authorities under Articles 16, 19 and 20 shall be immediately communicated to ESMA.

Central banks shall without undue delay inform ESMA of any securities settlement system that they operate.

The name of each CSD operating in compliance with this Regulation and to which authorisation or recognition has been granted pursuant to Article 16, 19 or 25 shall be entered in a register specifying the services and, where applicable, classes of financial instruments for which the CSD has been authorised. The register shall include branches operated by the CSD in other Member States, CSD links and the information required under Article 31 where Member States have made use of the possibility provided for in that Article. ESMA shall make the register available on its dedicated website and keep it up to date.

Section 3 Supervision of CSDs

Article 22

Review and evaluation

The competent authority shall review the arrangements, strategies, processes and mechanisms implemented by a CSD, including the plans referred to in Article 22a, with respect to compliance with this Regulation and evaluate the risks to which the CSD is, or might be, exposed or which it creates for the smooth functioning of securities markets or stability of the financial markets.

The competent authority shall establish the frequency and depth of the review and evaluation referred to in the first subparagraph having regard to the size, systemic importance, risk profile, nature, scale and complexity of the activities of the CSD concerned.

The review and evaluation shall take place at least every three years.

The competent authority shall subject the CSD to on-site inspections.

When performing the review and evaluation referred to in paragraph 1, the competent authority shall, at an early stage, transmit the necessary information to the relevant authorities and, where applicable, the authority referred to in Article 67 of Directive 2014/65/EU, and consult them on whether the requirements of this Regulation or other requirements of Union law are met by the CSD as regards the functioning of the securities settlement systems operated by the CSD.

The consulted authorities may issue a reasoned opinion within their areas of competence within three months of receipt of the information from the competent authority.

Where a consulted authority does not provide an opinion within that deadline it shall be deemed to have issued a positive opinion.

Where a consulted authority issues a negative reasoned opinion and the competent authority disagrees with it, that competent authority shall, within one month of receipt of the negative opinion, provide the consulted authority with a reasoning addressing the negative opinion.

Any of the consulted authorities that issued a negative opinion may refer the matter to ESMA for assistance under Article 31(2), point (c), of Regulation (EU) No 1095/2010.

Where the issue is not settled within one month of its referral to ESMA, the competent authority shall take the final decision on the review and evaluation and provide a detailed explanation of its decision in writing to the relevant authorities.

Negative opinions referred to in the fourth subparagraph shall state in writing the full and detailed reasons why the requirements laid down in this Regulation or other requirements of Union law are not met.

The competent authority shall inform the relevant authorities, ESMA and, where applicable, the college referred to in Article 24a of this Regulation and the authority referred to in Article 67 of Directive 2014/65/EU of the results, including any remedial action or penalties, of the review and evaluation referred to in paragraph 1 of this Article.

When performing the review and evaluation referred to in paragraph 1, the competent authorities responsible for supervising CSDs which maintain the types of relations referred to in points (a), (b) and (c) of Article 17(6) shall supply one another with all relevant information that is likely to facilitate their tasks.

The competent authority shall require a CSD that does not meet the requirements of this Regulation to take at an early stage the necessary actions or steps to address the situation.

10.

ESMA shall, in close cooperation with the members of the ESCB, develop draft regulatory technical standards to specify the following:

(a) the information that the CSD is to provide to the competent authority for the purposes of the review and evaluation referred to in paragraph 1;

(b) the information that the competent authority is to supply in accordance with paragraph 7;

ESMA shall submit those draft regulatory technical standards to the Commission by 17 January 2025.

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with in Articles 10 to 14 of Regulation (EU) No 1095/2010.

11.

ESMA shall, in close cooperation with the members of the ESCB, develop draft implementing technical standards to determine standard forms, templates and procedures for the provision of information referred to in the first subparagraph of paragraph 10.

ESMA shall submit those draft implementing technical standards to the Commission by 17 January 2025.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

Article 22a

Plans for recovery and orderly wind-down

The CSD shall identify scenarios that could potentially prevent it from being able to provide its critical operations and services as a going concern and shall assess the effectiveness of a full range of options for recovery or orderly wind-down. Those scenarios shall take into account the various independent and related risks to which the CSD is exposed. Using that analysis, the CSD shall prepare and submit to the competent authority appropriate plans for its recovery or orderly wind-down.

The plans referred to in paragraph 1 shall have regard to the size, systemic importance, nature, scale and complexity of the activities of the CSD concerned and contain at least the following:

(a) a substantive summary of the key recovery or orderly wind-down strategies;

(b) an identification of the CSD’s critical operations and services;

(c) adequate procedures ensuring the raising of additional capital in cases where the CSD’s equity capital approaches or falls below the requirements laid down in Article 47(1);

(d) adequate procedures ensuring the orderly wind-down or restructuring of the CSD’s operations and services where the CSD is unable to raise new capital;

(e) adequate procedures ensuring the timely and orderly settlement and transfer of the assets of clients and participants to another CSD in the event it becomes permanently impossible for the CSD to restore its critical operations and services;

(f) a description of the measures needed to implement the key strategies.

The CSD shall have the capacity to identify and provide to related entities the information needed to implement the plans on a timely basis during stress scenarios.

The plans shall be approved by the management body, or an appropriate committee of the management body.

The CSD shall regularly, and at least every two years, review and update the plans. Each update of the plans shall be provided to the competent authority.

Where the competent authority considers that the CSD’s plans are insufficient, the competent authority may require the CSD to take additional measures or to develop alternative measures.

Where a CSD is subject to Directive 2014/59/EU and a recovery plan has been drawn up under that Directive, the CSD shall provide that recovery plan to the competent authority.

Where a resolution plan under Directive 2014/59/EU, or a similar plan under national law with the aim of ensuring the continuity of a CSD’s core services, is established and maintained for a CSD, the resolution authority or, where no such authority exists, the competent authority shall inform ESMA of the existence of such a plan.

Where the recovery plan and the resolution plan under Directive 2014/59/EU, or any similar plan under national law, contain all of the elements listed in paragraph 2, the CSD shall not be required to prepare the plans pursuant to paragraph 1.

Section 4 Provision of services in another member state

Article 23

Freedom to provide services in another Member State

An authorised CSD may provide services referred to in the Annex within the territory of the Union, including through setting up a branch, provided that those services are covered by the authorisation.

An authorised CSD or a CSD that has applied for authorisation pursuant to Article 17 that intends to provide the core services referred to in Section A, points 1 and 2, of the Annex in relation to financial instruments constituted under the law of another Member State referred to in Article 49(1), second subparagraph, point (a), or to set up a branch in another Member State shall be subject to the procedure referred to in paragraphs 3 to 9 of this Article. The CSD may provide such services only after it has been authorised pursuant to Article 17 and not earlier than the date applicable in accordance with paragraph 8 of this Article.

Any CSD that intends to provide the services referred to in paragraph 2 in relation to financial instruments constituted under the law of another Member State referred to in Article 49(1), second subparagraph, point (a), for the first time, or to change the range of those services provided, shall communicate the following information to the competent authority of the home Member State:

(a) the host Member State;

(b) a programme of operations stating in particular the services which the CSD intends to provide, including the type of financial instruments constituted under the law of the host Member State in respect of which the CSD intends to provide such services;

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