What Changed
- ESMA issued regulatory clarification protecting EU market participants' access to third-country CSD services beyond 17 January 2027.
- The current transitional regime granting third-country CSDs access for EU-law financial instruments ends on 17 January 2027.
- The Council of the European Union and the European Parliament both support extending the transitional regime under the negotiating Market Integration and Supervision Package (MISP).
EU market participants, particularly financial instrument issuers, facing operational uncertainty regarding access to non-EU post-trade infrastructure have received regulatory clarification from the European Securities and Markets Authority (ESMA). As the EU’s financial markets regulator and supervisor, ESMA published a statement clarifying that EU market participants should not be prevented from accessing the services of third-country Central Securities Depositories (CSDs) beyond 17 January 2027, while the European Union finalises legislation to extend the applicable transitional regime.
Under the current regulatory framework, a transitional regime permits specific third-country CSDs to provide notary and central maintenance services for financial instruments constituted under the national laws of EU Member States. This transitional framework is set to expire on 17 January 2027. To address potential disruption, the proposed Market Integration and Supervision Package (MISP), which is currently under negotiation, includes provisions to extend the transitional timeline. ESMA noted its understanding that both key legislative institutions—the Council of the European Union and the European Parliament—support extending the regime.
Ahead of a formal political agreement on the legislative proposal, market participants, particularly issuers, raised concerns about operational challenges arising from uncertainty over whether continued access to third-country CSDs would be permitted post-2027. ESMA issued its statement well in advance of the 17 January 2027 deadline to resolve these concerns and ensure the orderly functioning of European capital markets.
This update primarily impacts EU issuers, financial market participants using cross-border CSD services, and non-EU CSD operators providing notary or central maintenance services for EU-constituted securities. The source material provided by ESMA does not specify the exact publication date of the statement.
Who May Be Affected
EU market participants, particularly issuers of financial instruments under EU Member State law, and third-country Central Securities Depositories (CSDs).
Cross-Border Context
Affects international securities servicing by connecting EU issuers and market participants with non-EU (third-country) central securities depositories offering notary and central maintenance services across borders.
What to check next
- Progress and adoption of the final political agreement on the Market Integration and Supervision Package (MISP).
- Full text of ESMA's official statement published on its news site.
This article provides general information and does not constitute legal advice. Consult the official text and obtain advice appropriate to your circumstances where needed.