Industry calls for clarity on mandatory buy-in rules

News Team, 19/07/2021

Sixteen trade associations including the European Fund and Asset Management Association (EFMA) and the Association for Financial Markets in Europe (AFME) as well as national bodies have called on the European Commission (EC) to change the implementation date for reforms of the securities settlement process.

The process includes mandatory buy-in rules as part of the Central Securities Depositories Regulation (CSDR) which is intended to make the post-trade environment in Europe more efficient by harmonising rules and processes.

However, there have been delays to its implementation starting with the UK’s announcement in June 2020 that it would not implement the EU’s changes and would carry on applying the current “industry-led” settlement framework.

However, the joint associations have welcomed the report from the on the CSDR review published in July 2021 and fully its intention to consider amendments to the mandatory buy-in regime, subject to an impact assessment.

In light of this, the Joint Associations request ESMA and the Commission to take action to ensure that the mandatory buy-in rules for non-CCP transactions are not subject to application on 1 February 2022, when the relevant RTS (regulatory technical standards) is currently set to enter into force, and to provide clarity to market participants on the matter on an urgent basis.

According to a statement from AFME, the joint associations are committed to further improving settlement efficiency in Europe’s capital markets, which as mentioned above is the aim of CSDR.

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