ESMA assesses supervision of Central Securities Depositories

The European Securities and Markets Authority (ESMA), published its Peer Review Report on the national supervision of Central Securities Depositories (CSDs) providing cross-border services or participating in interoperable links.
Six National Competent Authorities (NCAs) were evaluated in terms of how they supervise CSDs that use the freedom to provide services in another Member State. On-site visits to the CSSF (Luxembourg), FKTK (Latvia), and NBB (Belgium) were part of the exercise to gain a better understanding of how these NCAs supervise CSDs‘ cross-border activities.
Key findings:
+ NCAs generally have satisfactory initial authorisation processes that use adequate tools and procedures to assess cross-border links;
+ Some NCAs‘ approval processes during passporting procedures when acting in their capacity as host authority could be improved;
+ NCAs should consider improving cooperation among themselves, particularly with the home authorities of the CSDs that provide services in their jurisdiction.
+ Overall, NCAs conduct ongoing supervision of CSDs in a holistic way considering the entire organisation without distinguishing between domestic and cross-border services; and
+ NCAs supervisory approaches should follow a risk-based approach and rely on adequate tools to monitor risks.
A series of peer reviews mandated by the Central Securities Depositories Regulation will follow this first peer review.