ALFI responds to the ESMA consultation on CSDR Penalty Mechanism

ALFI agrees that the increase of penalty rates is one of the avenues that ESMA has now to explore in order to respond to the fund industry/buy-side concerns (CSDR running costs are outweighing the benefits by far, penalties are often not passed-on to the investment fund because non material). We reiterated to ESMA our request to obtain a summary of the penalty data, broken down by counterparty type (buyer-seller) and product.

Moreover, we urge ESMA to exempt ETF primary market transactions (between the ETF promoter and its authorised Participant) of cash penalties. Penalties should be reserved to the secondary market.

View the ALFI response.