AFME has published today a position paper highlighting the risk of mandatory buy-ins to Europe’s economic recovery from the Covid-19 crisis, and calling for this measure to be removed from the upcoming Central Securities Depositories Regulation (CSDR). According to the paper, the mandatory buy-in rules will negatively impact the market by:
- Increasing costs for issuers and investors
- Reducing investor appetite, in particular for SME securities
- Removing liquidity from European markets
AFME believes this is a disproportionate measure to address the small percentage of trades that fail. The trade association is calling for a more pragmatic, discretionary approach to the buy-in regime.