The European Securities and Markets Authority has clarified that EU market participants should not be prevented from accessing third-country central securities depositories after the current transitional regime expires on Jan. 17, 2027, while EU legislation to extend it is finalized. To avoid disruption, ESMA expects national competent authorities not to prioritize supervisory and enforcement action against third-country CSDs that have not been recognized by ESMA until the proposed extension takes effect. The regime allows certain third-country CSDs to continue providing notary and central maintenance services for financial instruments constituted under an EU member state's law while recognition remains pending. The Market Integration and Supervision Package proposes extending the transitional period for three years after the legislation enters into force, and ESMA understands that both EU co-legislators support an extension. ESMA stressed that neither it nor national authorities can suspend or disapply directly applicable EU law, meaning the extension itself requires EU legislation.
European Securities and Markets Authority expects national regulators to deprioritize enforcement against third-country CSDs pending EU extension
The European Securities and Markets Authority expects national regulators to deprioritize enforcement against unrecognized third-country CSDs after the current transitional regime expires on Jan. 17, 2027. This is intended to preserve access to notary and central maintenance services until EU legislation providing a proposed three-year extension takes effect.