Central Bank welcomes EU Commission announcement of temporary UK equivalence decision for the Central Securities Depository Regulation

The Central Bank of Ireland welcomes the announcement by the EU Commission of the temporary UK equivalence decision for the purposes of the Central Securities Depository Regulation (CSDR) until 30 June 2021.

Today’s announcement is another important action aimed at ensuring the Irish capital markets do not face disruption at end December 2020 when the UK’s transition period ends.

The temporary equivalence decision is a key milestone and allows the European Securities and Markets Authority (ESMA) commence the formal recognition process of Euroclear UK & Ireland (EUI). The process is necessary to provide the basis for Irish issuers’ securities to continue to be issued and settled through the CREST system, operated by EUI, for a time-limited period until the migration to the alternative EU-based CSD is complete.

Irish market participants have selected Euroclear Bank Belgium as the preferred long-term CSD solution for the Irish market. The Central Bank acknowledges and continues to monitor the work being undertaken by the project team and wider market participants, to facilitate the Irish market migration to the EU based CSD. However, the Central Bank highlights again the need for the whole industry to maintain momentum as it enters the final phase of this complex, multi-year migration project. We expect industry to continue to work to ensure successful migration by the agreed March 2021 timeline. The temporary equivalence timeline of June 2021 provides a contingency for potential unforeseen events affecting the expected migration in March 2021.

Commenting on today’s announcement, Deputy Governor Sharon Donnery said: “I would like to acknowledge the European Commission’s announcement on temporary equivalence. This is an important step towards ensuring the Irish capital market avoids disruption between 1 January 2021 and the planned migration of Irish issuers from EUI to the new provider in March 2021. The CSD migration project forms part of the extensive preparatory work by industry to mitigate the risks from the UK leaving the EU. Today’s announcement provides market participants the opportunity to complete a successful migration, as originally planned, in March 2021, which is the expectation of the Central Bank.”