As we move closer to the implementation deadline for the CSDR settlement discipline regime in November 2020, VP is intensifying its dialogue with market stakeholders.

VP is currently engaged in a series of meetings at which we provide background information regarding the CSDR settlement discipline regime and the latest regulatory developments. Furthermore, we discuss the impact of the upcoming new regime and the settlement discipline solution – with the aim of ensuring a smooth transition to the new regime.


As described in previous articles, ECSDA (the European Central Securities Depositories Association) has established a CSDR Penalties Framework covering part of the implementation of regulatory settlement discipline across the EU. The framework applies to all CSDs subject to CSDR or similar legislation and aims to ensure harmonised implementation. The framework also includes guidelines for the design of the penalty mechanism, and the collection and re-distribution of penalties, as well as other functionalities.
The ECSDA framework is still “work in progress” and may be subject to changes due to various working assumptions, which are currently being clarified in ongoing discussions within ECSDA and in consultation with the European Securities and Markets Authority (ESMA) and other industry bodies.

As a CSD operating under a CSDR licence, VP Securities is obliged to implement the new settlement discipline regime in order to comply with the CSD Regulation, including a penalty mechanism for VP batch settlement, and integration with the T2S penalty mechanism. The implementation of the new settlement measures and the development of the VP penalty mechanism are well under way.

As part of the process, VP Securities is in ongoing dialogue with market stakeholders and has initiated a regulatory dialogue with the Danish FSA to discuss and agree on interpretations and clarifications of the legal framework.


“The implementation of the new settlement discipline regime is an important task for VP Securities and we are highly aware that the new regime will impact market participants in different ways – by introducing new procedures and IT solutions, as well as penalties for late matching and settlement, and mandatory partial delivery and buy-in. Furthermore, market participants will be obliged to ensure the timely payment of penalties. All in all, the new regime requires high settlement efficiency – otherwise, market participants ultimately risk suspension,” says Morten Sprange Thomsen, Head of Post Trade Products.

Due to the complexity of the process towards implementing the CSDR settlement discipline regime and the issues that are still unresolved within the ECSDA framework, VP has planned the project to ensure agility and efficiency during the process – and to make it possible to develop new functionality, concurrently with the clarification of pending issues.

Key takeaways from stakeholder meetings

Due to the harmonised approach among CSDs to the CSDR settlement discipline regime, only few areas are open for “customised” solutions, i.e. few decisions need to be taken by CSDs and their customers, since virtually all issues have been discussed within the ECSDA CSDR Working Group and the T2S CSDR Task Force, subsequently resulting in harmonised solutions. To ensure client readiness, a number of key issues have been identified and discussed with market participants. Morten Sprange Thomsen concludes: “So far, the bilateral dialogue with market participants has been very useful, seen from VP’s perspective, and the input from meetings will support the ongoing decision-making process and the development of the required new solutions.”

Next steps towards the implementation deadline

As the implementation deadline approaches, VP expects the following key milestones to be reached:

  • December 2019: deployment of penalty mechanism to production, enabling VP to get real data regarding the value, volume and duration of settlement fails.
  • December 2019: development of partial delivery for VP batch settlement will be initiated.

Please do not hesitate to contact us for more information and feel free to re-visit previous articles on the CSDR settlement discipline regime published on 13 May 2019 and 21 June 2019. Morten Sprange Thomsen, Head of Post Trade Products, is available at +45 3010 2241 or