Regulation (EU) 909/2014 on improving securities settlement in the European Union and on central securities depositories ("CSD Regulation") was published in the Official Journal of the European Union on 28 August 2014.

The CSD Regulation constitutes the third pillar of the EU initiatives which affect the financial market value chain.

The three pillars of the new regulatory framework for securities market infrastructures and their respective implementation timelines are briefly described in the table below.

Value Chain

New Legislations

Entry into Force



MiFID II (1)

2 July 2014

As from 3 January 2017


EMIR (2)

16 August 2012

As from 13 March 2013 (3)


CSD Regulation

17 September 2014

As from December 2014 (4)

The CSD Regulation mainly introduces (i) an obligation of dematerialisation for securities traded via an organised trading facility or posted as collateral, (ii) harmonised settlement periods for transactions in these securities, (iii) settlement discipline measures, and (iv) common rules for central securities depositaries ("CSDs"), including, but not limited to, new organisational requirements, conduct of business rules and prudential requirements and authorisation regime.

The harmonisation of the settlement periods requires, among other things, a settlement date no longer than the second business day after the trading takes place ("T+2"), for most of the transactions in transferable securities which are executed on trading venues and settled in a securities settlement system.

Another part of the CSD Regulation deals with the provision by CSDs of a limited number of banking- ancillary services to CSD participants. The prudential and supervisory requirements applying to the CSD which provide these banking services are increased.

The implementation timeline of the CSD Regulation varies depending on the obligation covered, e.g. the dematerialisation obligation shall apply from 1 January 2023 to transferable securities issued after that date and from 1 January 2025 to all transferable securities, and the T+2 requirement shall apply from 1 January 2015 (5).

Today, CSDs operating in Luxembourg include LuxCSD, which is a national CSD and Clearstream Banking Luxembourg (CBL), which is the international ICSD (6).

(1) See the article dedicated to MiFID II (i.e. Directive 2014/65/EU (MiFID II) and Regulation (EU) 600/2014 (MiFIR), both on markets in financial instruments) in our last Newsletter of July 2014.

(2) EMIR refers to the European Market Infrastructure Regulation, i.e. the Regulation (EU) 648/2012 of 4 July 2012 on OTC derivatives, central counterparties and trade repositories.

(3) The effective implementation of the provisions of the CSD Regulation is phased in over different periods starting in March 2013.

(4) The effective implementation of the provisions of the CSD Regulation is phased in over different periods starting in January 2015.

(5) Subject to the derogation provided in Article 76.3 of the CSD Regulation.

(6) ICSDs are the only ones empowered to provide post-trade and securities services for the Eurobond market and for securities issued in a currency different from the national currency of the bond issuer.