Article 4 Procedure for obtaining a derogation from CSD access criterion 5
United Kingdom
A CSD may submit a request for a derogation from CSD access criterion 5 based on its specific operational or technical situation.
For a derogation request to be assessed, the CSD shall submit a request to the F1MIB and provide evidence of the following:
the derogation is for a very limited amount of settlement volume as a proportion of the total average daily delivery-versus-payment instructions received over a month at the CSD, and the cost of settling these operations in T2S would be excessive for the CSD;
the CSD has set technical and operational safeguards ensuring that the derogation will remain within the threshold set out in point (a);
the CSD has made every effort to meet CSD access criterion 5.
Following receipt of such request for a derogation:
the MIB shall submit the CSD’s request and its pre-assessment to the AMI SeCo;
the AMI SeCo shall provide the MIB with advice on the request without delay and in due time for it to be considered;
following receipt of advice from the AMI SeCo, the MIB shall prepare a final assessment and submit it, together with the entire set of documents, to the Governing Council;
the Governing Council shall issue a reasoned decision on the request for a derogation;
the MIB shall inform the CSD and the AMI SeCo in writing of the Governing Council’s reasoned decision.
A CSD designated by a CB that has signed a CPA and has opted for settlement of its monetary policy transactions in central bank money outside T2S, shall submit a request for a derogation in order to be able to settle such monetary policy transactions in central bank money outside T2S. In such case, a derogation shall be granted provided that: (a) the Eurosystem has received all relevant information on the technical functioning of such settlement; and (b) such settlement does not require changes to or negatively affect T2S functionality. The designating CB should be invited to provide its opinion on such request for a derogation.
A CSD with a derogation shall provide a monthly report to the MIB proving that it continues to comply with the derogation, including the agreed threshold set out in paragraph 2(a). A CSD with a derogation pursuant to paragraph 4 shall provide a monthly report to the MIB on the situation.
Where a CSD with a derogation consistently exceeds the agreed threshold set out in paragraph 2(a) within a 6-month period, the Governing Council shall withdraw the derogation due to non-compliance with CSD access criterion 5 and the MIB shall notify the CSD accordingly.
Following the withdrawal of a derogation, a CSD may submit a new request for a derogation in accordance with the procedure laid down in this Article.
Where there is a crisis situation that could impact the financial stability of a country or the relevant CB’s task to safeguard the integrity of its currency and has led the CB of the country concerned to move to a contingency type settlement as part of its crisis management plan, a CSD designated by that CB shall submit a request to the MIB for a temporary derogation from CSD access criterion 5, and may temporarily carry out settlement by other means. The Governing Council shall issue a reasoned decision on such request taking into account the relevant CB’s opinion on the situation warranting the temporary derogation from CSD access criterion 5. The relevant CB shall provide the MIB with a report, at least on a monthly basis, on its evaluation of the situation.