All actors in an institution should review their obligations and make the necessary operational changes ahead of the enforcement of the Settlement Discipline Regime (SDR), according to Deutsche Bank.
Deutsche Bank released the statement in a settlement discipline regime client toolkit, a document published ahead of the Central Securities Depository Regulation (CSDR) deadline on 14 September 2020.
SDR, an element of the CSDR binds together the trade and post-trade, aiming to improve the safety and efficiency of securities settlement by ensuring that buyers and sellers receive their securities and money on time and without risk.
The regulation provides a set of measures to prevent and address settlement failures–cash penalties, mandatory buy-ins and monitoring and reporting measures to be taken by the CSDs.
Deutsche Bank warned: “With the potential impact of penalties for poor performance and discipline in mind, the market needs to take action. The SDR toolkit gives market participants the tools and guidance they need to act effectively.”
James Cox, head of securities services, Europe, the Middle East and Africa at Deutsche Bank, said: “From timely and accurate trade bookings through to allocation, confirmation, settlement and inventory management–front-, middle- and back-offices are impacted.”
He added: “Given that an institution may be performing many different roles–from trading to settlement–everyone needs to understand their obligations and start to take action.”
