Quick Find:
CSDR-SD Working Group
The CSDR-SD Working Group is focused on the CSDR Settlement Discipline provisions, including the mandatory buy-in regime and cash penalties for settlement fails. The WG aims to identify and resolve practical implementation challenges related to the SD package, as well as directing ICMA’s advocacy work around the regulation. Members include sell-side and buy-side traders (bonds and repo), as well as operations experts and interested legal, compliance, and regulatory policy representatives.

If you or your firm would like to participate in the CSDR-SD Working Group, or would like to learn more about its focus and operation, please contact the SMPC secretariat. Observers from other associations are also welcome.



February 2019: ICMA submits proposals for ESMA Q&A on CSDR buy-ins and SFTs

Following discussions with the ICMA ERCC and ISLA, ICMA has submitted two Q&A proposals with respect to the CSDR mandatory buy-in provisions and securities financing transactions (SFTs). These cover:
ICMA will keep members informed of any subsequent feedback or discussions with ESMA.



January 2019: meetings/calls of the CSDR-SD Working Group
  • On January 22 the WG discussed the ICMA proposal for a pass-on mechanism intended to work under the CSDR mandatory buy-in framework for non-cleared transactions.
  • On January 23 the WG discussed proposals for applying mandatory buy-ins to securities financing transactions, in particular:
    • The treatment of open trades
    • Calculating the buy-in/cash compensation difference payment
    • Best practice for buying-in failing SFT start-legs
Note of the meeting on January 22 2019 to discuss a CSDR pass-on proposal
Note of the meeting on January 23 2019 to discuss Level 3 proposals for the application of CSDR buy-ins to SFTs



Meeting/call of the CSDR-SD Working Group on 20 November 2018
Discussion topics and related follow-up points included updating the ICMA Buy-in Rules to support adoption and as a contractual means to solve for the asymmetry, a proposal for a pass-on mechanism under the CSDR framework, and the various challenges of applying a buy-in regime to SFTs.
Note of call of the CSDR-SD Working Group on 20 November 2018



Draft proposal for a pass-on mechanism under the CSDR framework
ICMA has developed a draft proposal for a pass-on mechanism which could work under the CSDR buy-in framework. Following further input from members and the broader industry, ICMA intends to share the proposal with ESMA.
Draft proposal for a CSDR pass-on mechanism



Adapting the ICMA Buy-in Rules
Following the call of the ICMA Secondary Market Rules & Recommendations (SMR&R) Working Group on 3 July 2018, ICMA met with ESMA to discuss updating the ICMA Buy-in Rules (or a version of the Buy-in Rules) to align with the CSDR mandatory buy-in provisions for in-scope transactions. In particular, ICMA is exploring the possibility of using the adapted ICMA Buy-in Rules to solve for the asymmetry in the regulatory provisions. ICMA will continue to keep members updated as these discussions evolve.
CSDR Mandatory Buy-ins: Adapting the ICMA Buy-in Rules to align with implementation



Call of the CSDR-SD Working Group on 28 June 2018
The first call of the reformed CSDR-SD was held on 28 June 2018. Topics discussed included scope and application of the settlement discipline provisions, raising market awareness, implementation challenges (such as appointing buy-in agents), the potential adaption of the ICMA Buy-in Rules, and future advocacy.  
WG members will be kept informed of future calls, meetings, relevant information and proposed output.
Note of call of the CSDR-SD Working Group on 28 June 2018



ESMA Workshop on CSDR-SD
On 5 June 2018, ICMA participated in an ESMA Workshop on CSDR-SD, intended to engage industry associations and representative bodies to highlight and discuss potential challenges of implementing the settlement discipline regime. It is hoped that there will be subsequent industry workshops as the market prepares itself for the 2020 implementation deadline.
Agenda

More ICMA CSDR-SD resources can be found on the dedicated CSDR-SD webpage.




Contacts:

Andy Hill
Senior Director, Market Practice and Regulatory Policy; secretary to the ICMA Secondary Market Practices Committee.
Direct line: +44 20 7213 0335
EMAIL | DOWNLOAD BUSINESS CARD

Gabriel Callsen
Director, Market Practice and Regulatory Policy
Direct line: +44 20 7213 0334
EMAIL | DOWNLOAD BUSINESS CARD