Version in force , Modified +161 −0§
Amended by Regulation (EU) 2023/2845 32023R2845 on EUR-Lex (external, EUR-Lex)
Explanation, written by a model and checked against the cited text
Paragraph 3 now includes two additional exemptions from the penalty mechanism, covering settlement fails whose underlying cause is not attributable to the participants in the transaction, and operations that are not considered as trading.
The earlier version of this list began directly with the exemption for transactions where the failing participant is a CCP, without these two preceding points.
Cited: Art. 7, v2 (external, EUR-Lex) · Art. 7, v1 (external, EUR-Lex)
v1 is the previous version, v2 this one.
Text from EUR-Lex, before and after
Previous version, in force 17 January 2025 02014R0909-20250117 → this version, in force 17 January 2026 02014R0909-20260117
Article 7 Measures to address settlement fails 1. 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. 2. 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. 3. 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. 4. A CCP may … 684 unchanged words … 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.