FCMC: Infringement at the Baltic States’ single Central Securities Depository Nasdaq CSD SE due to an Incident in the data center

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The Financial and Capital Market Commission (FCMC) established an infringement of Article 45 of the CSDR(1)  at Nasdaq CSD SE, as, due to an incident that occurred in the primary data centre, there was a disruption in operation of all three securities settlement systems (Estonian, Latvian and Lithuanian) operated by Nasdaq CSD SE during more than two hours time which is maximum recovery target provided for by the CSDR to resume critical operations. 

Based on the information provided by Nasdaq CSD SE, the FCMC established that on 18 April 2018 an incident took place in the primary data centre premises (Väsby, Sweden), where the trading and clearing platforms are running and storage equipment are placed. Due to incident Nasdaq CSD SE could not provide core services of central securities depositories, referred to in Section A of the CSDR Appendix, on 18 April 2018, until 12:51. Therefore, obligation to restore critical functions of a CSD within two hours was not met.

Upon evaluation of the information provided by Nasdaq CSD SE, in the view of the FCMC, the actual effect on settlement activities within all three securities settlement systems caused by incident was not substantial, as there were a small number of instructions affected due to the incident.

At the same time, in its assessment of significance of the infringement, the FCMC takes into consideration the possible effect that such an incident could have on the Estonian, Latvian and Lithuanian financial markets. Therefore, the FCMC, in order to prevent reoccurrence of a similar infringement in the future, has imposed a sanction on Nasdaq CSD SE – a public statement about the infringement of Article 45 of the CSDR, by indicating the nature of the infringement.

The FCMC also takes into consideration the information provided by Nasdaq CSD SE on its actions taken or to be taken to assess and review its business continuity plans and procedures, in order to ensure continuity and timely resumption of critical operations in the event of incidents.

(1)  Regulation (EU) No. 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No. 236/2012

Further information:
Dace Jansone
Communications Division of the FCMC
Senior Specialist in Public Relations
ph.: + 371 67774808; e-mail: dace.jansone@fktk.lv

More about the FCMC:
www.fktk.lv, www.klientuskola.lv, Twitter.com/FKTK_LV


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