13 October 2022 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).
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 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.