In line with the ECB’s opinion on CSDR Refit, Rapporteur Johan Van Overtveldt considers regulation-driven mandatory buy-ins (MBIs) as a significant interference in the execution of securities transactions and the functioning of securities markets and suggests discarding the CSDR MBI regime it in its entirety.
ICMA welcomes the draft report from
the European Parliament’s Committee on Economic and Monetary Affairs on
the review of the Central Securities Depository Regulation (CSDR).
ICMA has long
advocated against the implementation of a regulatory buy-in regime in
the European bond markets, pointing out that as well as being immensely
difficult to apply, MBIs would negatively impact bond market pricing and
liquidity, could lead to market instability, and would undermine the
EU’s competitiveness as a global marketplace: a view broadly shared by
the ECB in its recently published opinion. ICMA has argued that more
targeted and proportionate initiatives to improve settlement efficiency
would be more effective, such as those recently introduced to ICMA’s
Secondary Market Rules & Recommendations, which provide best
practice guidelines for trade shaping, partial settlement, and the use
of CSD auto-borrow/lending programs.
ICMA
© ICMA
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