Deutsche Boerse CSDR buy-in agent gains banking licence
16 April 2020 Frankfurt
Image: XiXinXing/Shutterstock.com
Deutsche Boerse’s buy-in agent, Eurex Securities Transactions Services (Eurex STS), has gained a banking licence from the German regulator.
Eurex STS is set to offer an automated and standardised way to avoid the punitive features of the Central Securities Depositories Regulation’s (CSDR) settlement discipline regime, which aims to improve market settlement rates by threatening cash penalties and potentially costly mandatory buy-ins for failed trades.
The regime is slated to belatedly come into force in February, pending approval for the delay from September by the European Commission, which is expected soon.
The new service will handle buy-in requests and, when instructed to do so by registered clients, source the relevant securities in automated auctions and deliver them to the client on the same day, Eurex STS explains.
In addition to execution of the buy-in, the firm says it will be able to handle a range of other functions, including notification management with the seller and CSD, the calculation and settlement of price differences and compensations, as well as the fee compensation with the seller.
Eurex STS is also aiming to launch in early 2021 just ahead of the new regulatory go-live date and describes its licence approval from German Federal Financial Supervision Authority (BaFin) as a “key milestone” in achieving that target.
The green light from BaFin makes Eurex STS the fourth firm under the Deutsche Boerse Group to gain a banking licence.
The next step for the firm is to begin opening accounts with other essential infrastructure providers such as SWIFT and Clearstream, Deutsche Boerse’s international CSD, which it could not do without its banking licence.
From there, the firm will be able to onboard clients and begin end-to-end testing of its solution.
Access to the buy-in services can come either through a direct member model or, for smaller firms, indirectly via another financial entity.
The company was formed in 2019 after many months of preparation by Marcel Naas, formerly of Eurex Repo, and Marcus Addison, who shifted over from Eurex Clearing. It operates as a subsidiary of Eurex Frankfurt.
Since then, it has also brought on additional talent to make up its 30-strong team, including former-Deutsche Bank senior executive Marko Niederheide.
“Securing the banking licence from BaFin is a significant event for us in the launch of this new service,” says Naas. “We have been in contact with many potential clients who are interested in using our service and have been working with them to prepare and optimise their back-office functions in order to make the transition to the new settlement discipline regime as smooth as possible.”
Addison adds: “Our solution leverages our considerable experience in offering trusted securities trading infrastructure to the market – it will provide an automated and standardised solution to assist market participants with regulatory compliance.”
Speaking to SLT just after taking on their new roles at Eurex STS in November last year, the company’s founders outlined how they were uniquely placed to offer the buy-in service as the terms of CSDR stipulates it must be a neutral party in the market.
Eurex STS is set to offer an automated and standardised way to avoid the punitive features of the Central Securities Depositories Regulation’s (CSDR) settlement discipline regime, which aims to improve market settlement rates by threatening cash penalties and potentially costly mandatory buy-ins for failed trades.
The regime is slated to belatedly come into force in February, pending approval for the delay from September by the European Commission, which is expected soon.
The new service will handle buy-in requests and, when instructed to do so by registered clients, source the relevant securities in automated auctions and deliver them to the client on the same day, Eurex STS explains.
In addition to execution of the buy-in, the firm says it will be able to handle a range of other functions, including notification management with the seller and CSD, the calculation and settlement of price differences and compensations, as well as the fee compensation with the seller.
Eurex STS is also aiming to launch in early 2021 just ahead of the new regulatory go-live date and describes its licence approval from German Federal Financial Supervision Authority (BaFin) as a “key milestone” in achieving that target.
The green light from BaFin makes Eurex STS the fourth firm under the Deutsche Boerse Group to gain a banking licence.
The next step for the firm is to begin opening accounts with other essential infrastructure providers such as SWIFT and Clearstream, Deutsche Boerse’s international CSD, which it could not do without its banking licence.
From there, the firm will be able to onboard clients and begin end-to-end testing of its solution.
Access to the buy-in services can come either through a direct member model or, for smaller firms, indirectly via another financial entity.
The company was formed in 2019 after many months of preparation by Marcel Naas, formerly of Eurex Repo, and Marcus Addison, who shifted over from Eurex Clearing. It operates as a subsidiary of Eurex Frankfurt.
Since then, it has also brought on additional talent to make up its 30-strong team, including former-Deutsche Bank senior executive Marko Niederheide.
“Securing the banking licence from BaFin is a significant event for us in the launch of this new service,” says Naas. “We have been in contact with many potential clients who are interested in using our service and have been working with them to prepare and optimise their back-office functions in order to make the transition to the new settlement discipline regime as smooth as possible.”
Addison adds: “Our solution leverages our considerable experience in offering trusted securities trading infrastructure to the market – it will provide an automated and standardised solution to assist market participants with regulatory compliance.”
Speaking to SLT just after taking on their new roles at Eurex STS in November last year, the company’s founders outlined how they were uniquely placed to offer the buy-in service as the terms of CSDR stipulates it must be a neutral party in the market.
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