CSDR: Protecting your assets

by Phil Brown, Co-CEO of Clearstream Banking


Back in November 2016, I flagged up some of the issues the CSDR may present to customers. I focused then on the new settlement discipline regime that the CSDR will introduce - which will have a direct impact on customers in the form of cash penalties for late settlement, for example. Today I would like to highlight some of the positive examples of how the CSDR is designed to help us - as CSDs - keep customers’ assets safer and more secure.

One way the CSDR aims to help CSDs mitigate risks in the capital markets is by addressing both customer on-boarding and risk management protocols. We take both these areas very seriously at Clearstream where we already have a strict Know Your Customer (KYC) policy in place to check the integrity of our customers and their underlying customers as far as possible.

Each of our business areas impacted by the CSDR (which is pretty much all of them) are currently digesting the details of the CSDR and reviewing our operations accordingly to determine if, where and how we need to adjust our practices in order to comply. It’s within this context that we are currently reviewing our KYC and risk management protocols - for the benefit of our customers and the wider markets as a whole.

If you would like more information about how the CSDR impacts the market and CSD customers, please take a look at our customer briefing paper hosted on our dedicated CSDR webpages. Colleagues may also be interested in a video interview series hosted there, in which I offer further insight into the CSDR impact on our customers.

The CSDR has ramifications both for us as CSDs and our customers. But once implemented, it will help to make sure that customer assets are held in an extremely safe manner at CSDs across Europe, and it will help to lower structural risk in the financial markets of tomorrow.