Regulation on to clients and indirect clients and the conditions under which passing on is to be considered proportionate

This regulation sets out technical standards for how compensation or cash equivalents should be passed from central securities depositories to their clients and indirect clients. It ensures that when financial losses or errors occur in the settlement of securities, the resulting funds are distributed fairly and transparently to the rightful owners.

This affects financial institutions, investment firms, and investors who use central securities depositories. It clarifies the conditions under which passing on these funds is required and when it is considered disproportionate to do so.