As portfolio trading becomes more popular among buy-side traders, research has warned a large portfolio trade could increase risks around the CSDR buy-in regime if a single trade fails.
Daniel Carpenter, head of regulation at RegTech and post-trade services provider Meritsoft, a Cognizant company, tells The TRADE about how the ongoing changes to CSDR will impact the industry, and explains why so many market participants are not satisfied with the current framework.
The endorsement comes two months after the ESMA stated it would postpone enforcing the CSDR settlement discipline regime following an industry-wide lobby.
Watchdog rejects appeal for an overhaul of key pillars of CSDR from over a dozen concerned trade bodies, including the Investment Association.
Industry experts believe the UK may decide not to adopt one of the most controversial aspects of the new settlement regulation post-Brexit.
The delay from ESMA may not have gone far enough according to some market experts who believe challenges persist despite time extension.
After months of lobbying, trade associations and market participants get their wish as ESMA delays introduction of CSDR's settlement discipline regime.
Trade associations have said cash bond markets should be excluded from initial rollout of the CSDR buy-in regime until the regulation’s impact on liquidity is fully assessed.
Both buy- and sell-side firms agree the mandatory buy-in regime will have significant negative implications on Europe’s capital markets.
Daily penalties mean the upcoming Settlement Discipline Regime (SDR) is an issue for the front-office as well as the back, according to the DTCC.