The Central Securities Depositories Regulation (CSDR) is one of the key regulations adopted in the aftermath of the 2008 financial crisis and looks to ensure that the settlement of securities are carried out more safely and efficiently in Europe.
Coming into force on September 17, 2014, CSDR looks to establish an EU-wide harmonised regulatory framework for financial market infrastructures, covering a wide range of requirements in its phased implementation timeline.
The last phase due to be implemented is the “Settlement Discipline Regime” which seeks to improve settlement efficiency. This includes the provision of mandatory buy-ins and cash penalties for failed transactions.
These mandatory buy-ins pose a number of issues for parties involved in the settlement chain in European markets which requires industry preparation. (Read AFME’s framework that looks to assist firms).
AFME is engaged with regulators to help ensure that CSDR achieves its objectives of facilitating financial stability, while ensuring it does not come at the cost of the effective functioning of financial markets.