Deutsche Börse Group said it was taking another important step in its efforts to best support both the financial industry and the regulatory agenda. With the Deutsche Börse Buy-in Agent Service, the Group plans to launch a solution for an industry-wide challenge posed by the new regulatory framework of the Central Security Depository Regulation (CSDR).
Deutsche Börse said the new regulation on settlement discipline for securities trading transactions obliges the buyer in a securities transaction to initiate a buy-in process against the seller should the settlement of a transaction fail after a certain period of time. This requires a neutral third party who acts as buy-in agent. Subject to regulatory approval, the Deutsche Börse Buy-in Agent Service closes this gap and enables market participants to comply with the European regulation that will come into force in Q3 2020.
In addition, according to a company statement, the solution provides a high level of standardization and automation in order to resolve the operational burden that is associated with the new mandatory buy-in process.
The Buy-in Agent will therefore accept Buy-in requests from registered clients, source the securities in automated auctions, and deliver the securities on the same day to the clients’ account of choice. All costs associated with the Buy-in can be charged to the Seller.
In addition to the actual Buy-in execution, Deutsche Börse said the Buy-in Agent will offer the following services:
- On-hold instruction of the failed delivery by start of the buy-in
- Cancellation of the failed delivery by end of the buy-in
- Notification management with seller and CSD
- Calculation and Settlement of cash differences and cash compensations
- Settlement instructions for cash and securities with Power of Attorney
- Identification and resolution of settlement failure chains and cycles