Deutsche Börse Buy-in Agent Service solves industry-wide challenge

The new regulation on settlement discipline for securities trading transactions obliges the buyer in a securities transaction to initiate a buy-in process against the seller should the settlement of a transaction fail after a certain period of time. This requires a neutral third party who acts as buy-in agent. So far, these have not existed. Subject to regulatory approval, the Deutsche Börse Buy-in Agent Service closes this gap and enables market participants to comply with the European regulation that will come into force in the second half of 2020. In addition, the solution provides a high level of standardization and automation in order to resolve the operational burden which is associated with the new mandatory buy-in process.

“Since buy-in agent services are essential for the CSDR implementation, we developed this service in close cooperation with the market and our regulators,” says Erik Müller, Deutsche Börse Group’s Global Head of Clearing. “We look forward to starting our service to best support our clients and the regulatory agenda.”

Thies Clemenz, Managing Director, CACEIS Bank Germany Branch: “We are looking forward to the new service as it solves a regulatory problem. Our clients will benefit from this automated and standardized solution, which makes buy-in processes more efficient. Overall, we expect a substantial upgrading of the financial market infrastructure, especially as Deutsche Börse has involved the market in the development of its service.”

Markus Neukirch, Member of the Board Deutsche WertpapierService Bank AG: “The new regulatory framework CSDR is anticipated to be a challenge to the entire European finance industry. As the leading securities services provider for Germany’s financial market we are well prepared for this challenge. We are pleased to team up with Deutsche Börse Group to help create and implement the new Deutsche Börse Buy-in Agent Service for our approx. 1,300 member banks.”

The Deutsche Börse Buy-in Agent Service completes the Group’s existing offering for market participants to increase settlement efficiency, one of the key objectives of CSDR. This includes automated securities lending or the provision of one single pool of liquidity that allows for efficient settlement and collateral management across central-bank money and commercial-bank money settlement environments.