Following the postponement of the of Mandatory Buy-in provisions (MBIs) under the Central Securities Depositories Regulation (CSDR), Pablo Portugal, Managing Director of Advocacy at the Association for Financial Markets in Europe, said:
“We strongly welcome the agreement by EU legislators to postpone the implementation of the mandatory buy-in provisions in the Central Securities Depositories Regulation (CSDR). The mandatory buy-in rules have been widely acknowledged as being flawed and disproportionate. Their impact would lead to wider spreads and less liquidity, meaning more expensive and less efficient capital markets for Europe’s issuers and investors.
“We therefore support the approach to decouple the implementation of the mandatory buy-in rules from all other aspects of the settlement discipline regime. This would allow other appropriate measures, such as the penalties regime, to take effect as planned in February 2022, but avoid implementation of the current buy-in rules.
“Market participants will be awaiting further clarity from European authorities on the implementation of settlement discipline measures in February 2022 following today’s announcement.
“The planned review of the CSDR in 2022 should fundamentally reconsider mandatory buy-ins and lead to a more proportionate regime that supports Europe’s capital markets.”