Industry consortium interpret latest CSDR mandatory buy-in statement from ESMA
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Industry consortium interpret latest CSDR mandatory buy-in statement from ESMA 23 December 2021UK Reporter: Jenna Lomax
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An industry consortium has co-signed a joint-association statement setting out a common interpretation of the European Securities and Markets Authority’s (ESMA’s) statement which outlines EU legislators do not expect market participants to take further action towards implementation of the mandatory buy-in requirements.
Associations who signed the statement include the International Capital Market Association (ICMA), the International Securities Lending Association (ISLA), the Association for Financial Markets in Europe (AFME), the International Swaps and Derivatives Association (ISDA) and the European Fund and Asset Management Association (EFAMA), among others.
The industry co-signing follows ESMA’s long-awaited announcement on 17 December officially confirming the postponement of the mandatory buy-in component of the Central Securities Depositories Regulation (CSDR).
The Joint Associations’ understanding of the announcement is that national competent authorities are not expected to prioritise supervisory actions in relation to the application of the CSDR mandatory buy-in regime when it comes into effect on 1 February 2022.
The ESMA public statement follows agreement between the European Commission, the Council, and European Parliament at the 24 November 2021 trilogue meeting for the Distributed Ledger Technology Pilot Regime Regulation that the mandatory buy-in regime should be decoupled from the CSDR Settlement Discipline package in order to delay its implementation.
This is in light of the ongoing European Commission review of CSDR, with amendments to the regime and implementation timeline expected in the first half of 2022.
The ESMA statement is intended to bridge the legislative gap until a new date of application has been passed into law.
In January 2020 and March 2021, an alliance of 14 trade bodies called for a CSDR buy-in delay, this included ICMA, ISLA, AFME, ISDA and EFAMA.
On 30 June 2021, the European Commission released an interim report on the CSDR settlement discipline regime to the European Parliament and European Council. That followed a targeted consultation process which ran from 8 December 2020 to 1 February 2021.
In July 2021, the Joint Trade Associations again wrote to the European Commission and ESMA regarding the implementation schedule for mandatory buy-in rules.
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