Article 46 Investment policy
United Kingdom
A CSD must hold its financial assets at any one or more of the following kinds of institution:
central banks;
credit institutions with permission to accept deposits under Part 4A of FSMA;
CSDs and third-country CSDs recognised by the competent authority;
third-country financial institutions that are subject to and comply with asset protection and prudential rules considered by the competent authority to be at least as stringent as those laid down in Directive 2013/36/EU UK law F2, Regulation (EU) No. 575/2013 and CRR rules, and which the CSD assesses as having—
robust accounting practices;
safekeeping procedures;
internal controls which ensure the full protection of those financial assets; and
low credit risk based upon an internal assessment by the CSD; or
third-country CSDs which comply with asset protection rules considered by the competent authority to be at least as stringent as those laid down in this Regulation, and which the CSD assesses as having—
robust accounting practices;
safekeeping procedures; and
internal controls which ensure the full protection of those financial assets.
A CSD shall have prompt access to its assets, where required.
A CSD shall invest its financial resources only in cash or in highly liquid financial instruments with minimal market and credit risk. Those investments shall be capable of being liquidated rapidly with minimal adverse price effect.
The amount of capital, including retained earnings and reserves of a CSD which are not invested in accordance with paragraph 3 shall not be taken into account for the purposes of Article 47(1).
A CSD shall ensure that its overall risk exposure to any individual F3institution of a kind referred to in paragraphs 1(b) to 1(e) with which it holds its financial assets remains within acceptable concentration limits.
F4The Bank of England may make regulatory technical standards specifying the financial instruments that can be considered to be highly liquid with minimal market and credit risk as referred to in paragraph 3, the appropriate timeframe for access to assets referred to in paragraph 2 and the concentration limits as referred to in paragraph 5. Such draft regulatory technical standards shall, where appropriate, be aligned to the regulatory technical standards adopted in accordance with Article 47(8) of Regulation (EU) No 648/2012.
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Annotations
Textual amendments
- F1
Art. 46(1) substituted (31.12.2020) by The Central Securities Depositories (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1320), regs. 1(3), 17(2)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
- F2
Words in Art. 46(1)(d) substituted (1.1.2022) by The Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021 (S.I. 2021/1376), regs. 1(3), 26(3)
- F3
Words in Art. 46(5) substituted (31.12.2020) by The Central Securities Depositories (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1320), regs. 1(3), 17(2)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
- F4
Words in Art. 46(6) substituted (31.12.2020) by The Central Securities Depositories (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1320), regs. 1(3), 17(2)(c)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
- F5
Words in Art. 46(6) omitted (31.12.2020) by virtue of The Central Securities Depositories (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1320), regs. 1(3), 17(2)(c)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)