Commission Delegated Regulation (EU) 2017/392Show full title

SECTION 1 Criteria justifying refusal of access (Articles 33(3), 49(3), 52(2) and 53(3) of Regulation (EU) No 909/2014)

Article 89 Risks to be taken into account by CSDs and competent authorities

1. Where, in accordance with Articles 33(3), 49(3), 52(2) or 53(3) of Regulation (EU) No 909/2014, a CSD carries out a comprehensive risk assessment following a request for access by a requesting participant, an issuer, a requesting CSD, a CCP or a trading venue, as well as where a competent authority assesses the reasons for refusal by the CSD to provide services, they shall take into account the following risks resulting from access to the services of the CSD:

(a) legal risks;

(b) financial risks;

(c) operational risks.

2. When assessing legal risks following a request for access by a requesting participant, a CSD and its competent authority shall take into account the following criteria:

(a) the requesting participant is not able to comply with the legal requirements for participation in the securities settlement system operated by the CSD, or does not provide the CSD with the information necessary for the CSD to assess the compliance, including any required legal opinions or legal arrangements;

(b) the requesting participant is not able to ensure, in accordance with the rules applicable in the home Member State of the CSD, the confidentiality of the information provided through the securities settlement system, or does not provide the CSD with the information necessary for the CSD to assess its ability to comply with those rules on confidentiality, including any required legal opinions or legal arrangements;

(c) where a requesting participant is established in a third country, either of the following:

(i)

the requesting participant is not subject to a regulatory and supervisory framework comparable to the regulatory and supervisory framework that would be applicable to the requesting participant if it were established in the Union;

(ii)

the rules of the CSD concerning settlement finality referred to in Article 39 of Regulation (EU) No 909/2014 are not enforceable in the jurisdiction of the requesting participant.

3. When assessing legal risks following an issuer's request for recording its securities in the CSD in accordance with Article 49(1) of Regulation (EU) No 909/2014, the CSD and its competent authority shall take into account the following criteria:

(a) the issuer is not able to comply with the legal requirements for the provision of services by the CSD;

(b) the issuer is not able to guarantee that the securities have been issued in a manner that enables the CSD to ensure the integrity of the issue in accordance with Article 37 of Regulation (EU) No 909/2014.

4. When assessing legal risks following a request for access by a requesting CSD, the receiving CSD and its competent authority shall take into account the criteria set out in points (a), (b) and (c) of paragraph 2.

5. When assessing legal risks following a request for access by a CCP, a CSD and its competent authority shall take into account the criteria set out in points (a), (b) and (c) of paragraph 2.

6. When assessing legal risks following a request for access by a trading venue, a CSD and its competent authority shall take into account the following criteria:

(a) the criteria set out in point (b) of paragraph 2;

(b) where a trading venue is established in a third country, the requesting trading venue is not subject to a regulatory and supervisory framework comparable to the regulatory and supervisory framework applicable to a trading venue in the Union;

7. When assessing financial risks following a request for access by a requesting participant, a CSD and its competent authority shall take into account whether the requesting participant holds sufficient financial resources to fulfil its contractual obligations towards the CSD.

8. When assessing financial risks following an issuer's request for recording its securities in the CSD in accordance with Article 49(1) of Regulation (EU) No 909/2014, a CSD and its competent authority shall take into account the criterion set out in paragraph 7.

9. When assessing financial risks following a request for access by a requesting CSD, the receiving CSD and its competent authority shall take into account the criterion set out in paragraph 7.

10. When assessing financial risks following a request for access by a CCP or a trading venue, a CSD and its competent authority shall take into account the criterion set out in paragraph 7.

11. When assessing operational risks following a request for access by a requesting participant, a CSD and its competent authority shall take into account the following criteria:

(a) the requesting participant does not have the operational capacity to participate in the CSD;

(b) the requesting participant does not comply with the risk-management rules of the receiving CSD, or it lacks the necessary expertise in that regard;

(c) the requesting participant has not put in place business continuity policies or disaster recovery plans;

(d) the granting of access requires the receiving CSD to undertake significant changes of its operations affecting its risk-management procedures and endangering the smooth functioning of the securities settlement system operated by the receiving CSD, including the implementation of ongoing manual processing by the CSD.

12. When assessing operational risks following an issuer's request for recording its securities in the CSD in accordance with Article 49(1) of Regulation (EU) No 909/2014, a CSD and its competent authority shall take into account the following criteria:

(a) the criterion set out in point (d) of paragraph 11;

(b) the securities settlement system operated by the CSD cannot process the currencies requested by the issuer.

13. When assessing operational risks following a request for access by a requesting CSD, or a CCP, the receiving CSD and its competent authority shall take into account the criteria set out in paragraph 11.

14. When assessing the operational risks following a request for access by a trading venue, the receiving CSD and its competent authority shall take into account at least the criteria set out in point (d) of paragraph 11.