ICMA releases mandatory buy-in advice
26 June 2018 Zurich
Image: Shutterstock
The International Capital Market Association (ICMA) has published a new report on the potential market consequences of the settlement discipline provision of the Central Securities Depository Regulation (CSDR).
The report, titled 'How to survive in a mandatory buy-in world', explains the additional market risks and economic uncertainties the CSDR buy-in regime will create for bond market participants, buyers and sellers, as well as intermediaries and lenders of securities.
While CSDR deals mainly with the regulation of Europe’s settlement systems, it contains a section on ‘settlement discipline’, which includes measures to improve settlement efficiency, such as cash penalties for fails. Among these is the provision for mandatory buy-ins.
ICMA chief executive, Martin Scheck, said: “The CSD regulation, while undoubtedly well-intentioned, will in one respect present major challenges for anyone transacting business in the European cross-border bond markets.”
“This report prepared by ICMA’s secondary bond market committee of active bond market participants aims to make clear the consequences of making buy-ins mandatory, well in advance of the regulation coming into force in two years’ time”.
The report, titled 'How to survive in a mandatory buy-in world', explains the additional market risks and economic uncertainties the CSDR buy-in regime will create for bond market participants, buyers and sellers, as well as intermediaries and lenders of securities.
While CSDR deals mainly with the regulation of Europe’s settlement systems, it contains a section on ‘settlement discipline’, which includes measures to improve settlement efficiency, such as cash penalties for fails. Among these is the provision for mandatory buy-ins.
ICMA chief executive, Martin Scheck, said: “The CSD regulation, while undoubtedly well-intentioned, will in one respect present major challenges for anyone transacting business in the European cross-border bond markets.”
“This report prepared by ICMA’s secondary bond market committee of active bond market participants aims to make clear the consequences of making buy-ins mandatory, well in advance of the regulation coming into force in two years’ time”.
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