CSDR – SDR Mandatory buy-in will not start February 2022
The Settlement Discipline Regime (“SDR”) is part of the third phase of the implementation of the Central Securities Depositories Regulation (“CSDR”). SDR provides a set of measures to prevent and address failures in the settlement of securities transactions, including cash penalties, mandatory buy-ins and monitoring and reporting measures to be taken by the CSDs. It is currently scheduled to come into force on 1 February 2022.
Mandatory buy-in, the key measure (with the application of penalties) of the SDR package, had been the subject of considerable criticism. The European Parliament agreed on 24 November 2021 to a postponement of the starting date of the mandatory buy-in.
This is an essential step forward for the industry and the culmination of several years in which the professional associations have advocated for the removal of this measure. The proposed revision of the CSDR is expected to be published by the EC in late 2021/early 2022. It will also be an opportunity for the professional associations to participate in the reflections that will not fail to be led by ESMA, including suggestions regarding the buy-in regime.
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