CSDR Refit – SDR Parliament adopts its amendments
After the Council, which voted last December 2022 to amend the European Commission's (EC) proposal, the Parliament formalised its vision of the future CSDR Refit.
In its version adopted on 1 March 2023, the Parliament (EP) has decided to maintain the redemption obligation (MBI) as a tool at the disposal of the EC. On the other hand, like the Council, it strengthens the conditions for its implementation; for example, only two of the three conditions proposed by the EC are retained and, moreover, become cumulative.
Another notable point in the EP proposals is that the quality of the outcome in Europe (prior to any introduction of MBI) will have to be assessed at the end of the Extension Period. This was a strong demand from professional associations because deciding on the implementation of the MBI on the basis of what has not been finalized at the theoretical conclusion date is tantamount to ignoring that almost all of these suspensions are resolved in the very first days and, therefore, to imposing the consequences of the MBI (contractual impacts, liquidity impacts, etc.) on all transactions for only a few residual cases.
The legislative process will now enter the next phase (the so-called Trilogue phase).