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