BNY Mellon has halted further investment into its Belgium-based central securities depository (CSD).
A spokesperson for the custodian bank, which set the entity up in 2012, confirmed that it was “considering its options” with respect to the BNY Mellon CSD. He confirmed BNY Mellon is in dialogue with the National Bank of Belgium, the regulator of the entity.
With the delay of CSDR, as well as the delay by the European Securities and Market Authority (ESMA) for the introduction of the settlement discipline, CSDs face increasing uncertainty.
In addition, the regulation has become more restrictive as it requires CSDs to appoint and operate a limited purpose vehicle when settling in commercial bank money at the central bank.
BNY Mellon has stated plans for its CSD to go live on TARGET2 Securities (T2S), Europe’s incoming settlement platform, in the fourth wave in February 2017.