ICMA: New market buy-in regime threatens European bond market liquidity

27 November 2019

ICMA published a study on the expected impact of the new mandatory buy-in regime, to be introduced in 2020 under the EU Central Securities Depositories Regulation (CSDR), on bond markets in Europe.

The study also shows that the mandatory buy-in framework, indirectly, creates additional risks for lending securities. This is expected to impact pricing and liquidity in the repo and securities lending market, most notably with respect to less liquid bondsub-classes, such as credit and emerging markets. Martin Scheck, ICMA Chief Executive said: “We have already indicated to our members that we will be consulting them about a change to the ICMA Buy-in Rules, which they have relied on to set best practice for decades, in response to concerns about problematic anomalies in this new regime. We expect the ICMA Buy-in Rules to continue to provide a contractual framework and best practice for executing buy-ins, while also addressing some of the issues presented by the regulation.”

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