A delay of the controversial buy-in rule continues to be considered, but without any action, unrest is setting in among market participants as deadline for implementation looms.
With seven months to go until the go-live of SDR, participants have grown increasingly worried they will be unable to make changes to operations to meet the rules.
Following the UK’s official exit from the EU single market, regulators on both sides of the Channel appear to be splitting on post-trade regulations. What are the potential consequences of this on the post-trade industry, asks Joe Parsons.
The majority of industry bodies and market participants will most likely focus their feedback on the settlement penalties and the buy-in components of CSDR.
The proposal came in response to a request from the European Commission to further postpone the Settlement Discipline Regime.
Advanced discussions are underway among EU regulators to propose a delay, The TRADE understands, though confirmation of this could still be months away.
The Treasury has said it will not implement SDR in February 2021, but UK firms will still have to comply with the buy-in regime for EU transactions.
The combined solution will deliver a real-time platform for clients to manage the settlement fail and buy-in process.
As portfolio trading becomes more popular among buy-side traders, research has warned a large portfolio trade could increase risks around the CSDR buy-in regime if a single trade fails.
Daniel Carpenter, head of regulation at RegTech and post-trade services provider Meritsoft, a Cognizant company, tells The TRADE about how the ongoing changes to CSDR will impact the industry, and explains why so many market participants are not satisfied with the current framework.