Full implementation of the European Central Securities Depositories Regulation (CSDR) are on the horizon following the final draft publication of the regulatory technical standards on the 25th May 2018, with final settlement discipline rules now entering into force in either Q3 or Q4 of 2020 following the finalization of the next consultation period. CSDR is expected to have a significant impact on all settlement participants.

In our experience, only a few organizations are on track to fully comply with these regulations, which presents a host of issues—including the potential for severe financial penalties. In fact, failure to comply with CSDR could run into the multi millions in Euro penalties incurred in the first year.

Accenture Post-Trade Processing, our securities processing business unit, has developed a solution to get settlement market participants up to speed to gain the full value of the CSDR, starting with an impact assessment.

Your first step toward CSDR readiness—a CSDR impact assessment

As laid out before, settlement participants are under pressure to optimize settlement efficiency ahead of the CSDR go-live deadline and avoid the impending penalties regime of the CSDR. By performing a CSDR impact assessment (which includes processing your historical data through our data analytics tools), we can help you:

  • Understand the financial impacts of CSDR through the production of descriptive, diagnostic and predictive analytics models and visualizations
  • Recognize the limitations of your current platforms, from both a functional and a technical perspective
  • Assess your options for future target state system upgrades in preparation for the introduction of CSDR, leveraging both enhancements and/or vendor software packages and solutions

Our analytics results could either validate your understanding of the impacts of CSDR on your firm or provide information that can be used as business case justification for securing investments toward future-proofing your firm against CSDR non-compliance.

A deeper look into Accenture’s CSDR impact assessment

Here is a detailed look at the features and capabilities we apply to help you understand your current position and better prepare for CSDR:

  1. Deliver a settlement fails analytics platform to process and cleanse trade data and reveal a single view of failing trades, with meaningful breakdowns by country, asset type, counterparty, trading desk and trading book
  2. Simulate CSDR penalties and mandatory buy-ins to support a comprehensive impact assessment, quantifying the potential fines and additional manual effort due to CSDR
  3. Perform a deep dive analysis to identify underlying root causes, patterns and potential mitigation of CSDR penalties and buy-ins
  4. Help identify immediate insights and settlement efficiency opportunities in your settlement operations operating model
  5. Provide data to support the business cases for CSDR readiness and improvement projects, such as technology upgrades and settlement operations or front office initiatives
  6. Establish a capability and methodology for a more data-driven approach to scope, governance, prioritization and value identification for each initiative

Improving your business outcomes

Our data analytics capabilities can help to increase the business impact of your CSDR readiness projects. The toolkit provides a holistic view of settlement fails, penalties and buy-ins and reveals underlying root cause. We can also map fail volume, value and penalties to business lines and counterparties so you can share the impact of CSDR with your leadership team. Our verifiable data analysis ensures your improvement initiative business cases are built on sound information, while increasing accountability for business outcomes and bringing greater transparency to the impact of these initiatives. And lastly, our analysis acts as a key driver of business readiness and improvement while enabling the cross-divisional collaboration that helps you prepare for and measure progress toward CSDR compliance.

The time to act is now

Where is your firm on the CSDR-readiness spectrum? Our solution can give you the valuable insights you need so you can take the right steps toward preparing your firm for CSDR implementation and protect your business and your customers from significant risks. The time to act is now.

Interested in a chat on the topic? Please contact me at dean.l.jayson@accenture.com.