QCA Response to ESMA Consultation on Technical Standards under the CSD Regulation

19th February 2015

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Our Secondary Market Expert Group contributed to our response to ESMA consultation on Technical Standards under the CSD Regulation.

Our Secondary Market Expert Group contributed to our response to ESMA consultation on Technical Standards under the CSD Regulation.
We supported the proposed procedures for calculation of fines as these create a relatively simple process to facilitate settlement. Nevertheless, we noted that ESMA’s proposed Technical Standards and Advice do not take into account the illiquid nature of trading in small and mid-size quoted companies’ stocks, and urged ESMA to reconsider its recommendations. Furthermore, we noted our concern regarding the proposed cash compensation mechanism in less liquid securities, which will lead to short squeeze situations either as a result of a natural technical situation or a deliberate case of market abuse.

Click here to download the response (pdf)