ESMA statement on treatment of settlement fails following incident affecting T2S and T2 in February 2025

The European Securities and Markets Authority (ESMA) has published a statement confirming that national competent authorities do not expect central securities depositories (CSDs) to impose cash penalties under the Central Securities Depositories Regulation for settlement fails in EEA CSDs that occurred on 27 and 28 February 2025, in the wake of the T2S and T2 incident on 27 February. The incident meant that no settlement instructions, payment, ancillary system instructions or liquidity transfers between TARGET services could be processed for a number of hours. The incident had significant knock-on effects on the total number and value of settlement fails. Given this was a failure of infrastructure (which was a circumstance independent of the involved participants), it would not be justified to impose cash penalties.

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