CSDR Mandatory Buy-In Rules Delayed

Yesterday, the EU legislators agreed on the postponement of the Mandatory Buy-In Rules from their planned implementation date of 1 February 2022. The political agreement was confirmed in a tweet by EU Commissioner, Mairead McGuiness.

This news is welcomed by the industry as the Mandatory Buy-In Rules were the most controversial requirements of the CSDR Settlement Discipline Regime.

We are waiting for the detail of the postponement (including how long the postponement will be - although ESMA has indicated informally that a 2 - 3 year delay is likely to be considered). However, as the formal process will likely involve an official regulatory amendment which will not be possible prior to 1 February 2022, it is expected that ESMA will issue a public statement asking national competent authorities not to prioritise supervisory actions in respect of non-compliance with the Mandatory Buy-In rules (i.e. regulatory forbearance).

In light of these developments, as a practical matter, we are not expecting firms to continue work on compliance with the Mandatory Buy-In Rules. Focus will instead be on Cash Penalties and Allocations which will still come into effect on 1 February 2022.

Although postponement of the Mandatory Buy-In Rules will significantly reduce firms' CSDR workloads, there is still some work to be done in relation to these other requirements. Read our note on what you need to do here.