ESMA statement on extended transitional period for third-country CSDs

The European Securities and Markets Authority (ESMA) has published a statement on the transitional regime for third-country central securities depositories (CSDs). ESMA notes that, under the Central Securities Depositories Regulation (Regulation 909/2014), third-country CSDs may continue to provide certain notary services to issuers and central maintenance services to participants only until a recognition decision is taken or until 17 January 2027, whichever is earlier. ESMA highlights that the Market Integration and Supervision Package (MISP) proposes to extend this transitional period by a further three years following MISP’s entry into force, and that both the Council of the EU and the European Parliament appear broadly supportive of the extension.

In response to operational concerns raised by market participants, and in light of the emerging consensus among EU co-legislators, ESMA acknowledges that neither it nor national competent authorities (NCAs) can suspend or disapply directly applicable EU legislation, even in exceptional circumstances, and that any formal changes to the applicable regime would require EU legislation. Nonetheless, ESMA expects NCAs not to prioritise supervisory or enforcement action against non-recognised third-country CSDs pending the proposed extension under MISP taking effect.

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