Sandra Holmqvist

Settlement Discipline Regime (SDR) is a part of CSDR that outlines measures that CSD’s and participants must take to reduce/prevent settlement fails. 

The Settlement Penalties and Buy-In (SPBI) project is the last Euroclear Sweden project addressing these requirements. It covers the following:

  • Settlement Penalties 
  • Buy-In
  • Settlement Fails Reporting

Recently, a delegated Regulation was adopted by the EU Commission postponing the application of Settlement Discipline of the CSDR from 1 February 2021 to 1 February 2022. The Euroclear Sweden Project Approach for the remainder of the solution scope is:

  • Domestic penalties solution has already been released into production during November 2020
  • Cross Border penalties solution is almost complete and will likely follow suit Q1 2021
  • Buy-In functionality is currently on-hold pending market discussions (ECSDA, Swift, ESMA)
  • Settlement Fails reporting planned for Q3 2021 pending ESMA guidelines

The domestic penalties solution is non-intrusive on existing business flows and therefore is an excellent candidate for running in parallel production. The solution functions currently as a calculation engine only and storing the results. Clearing members have the possibility to subscribe to the output. Penalty collection/distribution is a manually triggered process, that will not be initiated until after in-force date.

Customer projects can already now connect to and begin validating production data. This allows all customers to independently be “in production” prior to in-force date. Also, this means that each customer will have full control over their own launch on 1 February 2022.

The existing penalty regime remains until the in-force date.

What happens 2021?

  • A market test plan will be released – mostly outlining test windows and code freeze date.
  • Each customer will lead and execute their own project according to their own schedule.
  • Euroclear will provide support as normal and coordinate amongst projects to ensure transparency and awareness.
  • During 2021 Euroclear will work with Operational Readiness preparations (e.g. collection and distribution process with settlement banks).
  • As of Feb 1st 2022 settlement fails will be in-scope for CSDR penalties.

Please do not hesitate to contact us at [email protected] if there is something we can help you with.


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