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Eurex STS secures German banking licence for Buy-in Agent service

Datum: 16. Apr 2020 | Eurex

Eurex STS secures German banking licence for Buy-in Agent service

- Launching in early 2021, the Buy-in Agent service will offer an automated and standardized solution to meet the CSDR’s settlement discipline regime

- BaFin has granted Eurex STS, a subsidiary of Eurex Frankfurt AG, a banking licence 

Eurex Securities Transactions Services GmbH (Eurex STS) has obtained a banking licence from the German Federal Financial Supervision Authority (BaFin), a key milestone required to offer Buy-in Agent services once the settlement discipline aspect of the CSDR regulation comes into effect. 

This new regulation obliges the buyer in a securities transaction to initiate a buy-in process against the seller, if the settlement of a transaction fails after a certain period. The regulation calls for a neutral third party to act as the Buy-in Agent. Eurex STS’ Buy-in Agent service will be able to act as this third party and thus enable market participants to comply with the new regulation. The goal of this regulation is to increase efficiency in the area of securities settlement by, for example, reducing the number of settlement fails that occur. 

“We are delighted to have received the banking licence from BaFin, and we will continue to work towards launching our new service for the buy-in regime in February 2021,” says Marcus Addison, Managing Director at Eurex STS. “Our solution leverages our considerable experience in offering trusted securities trading infrastructure to the market – it will provide an automated and standardized solution to assist market participants with regulatory compliance.”  

“Securing the banking licence from BaFin is a significant event for us in the launch of this new service,” says Marcel Naas, Managing Director at Eurex STS. “We have been in contact with many potential clients who are interested in using our service and have been working with them to prepare and optimize their back-office functions in order to make the transition to the new settlement discipline regime as smooth as possible.”

The new service will handle buy-in requests and, when instructed to do so by registered clients, source the relevant securities in automated auctions and deliver them to the client on the same day. 

In addition to execution of the buy-in, Eurex STS’ service will handle a range of other functions, including notification management with the seller and CSD, the calculation and settlement of price differences and compensations, as well as the fee compensation with the seller.