German exchange group Deutsche Boerse has named the leadership for its new buy-in agent service, which aims to fill a role mandated by the incoming Central Securities Depository Regulation (CSDR).
Marcel Nass and Marcus Addison will take on new responsibilities for setting up the service and leading its development.
Nass previously headed Eurex Repo since its foundation in 2001, while Addison was head of default management at Eurex Clearing.
Responsibilities for Eurex Repo will be taken up by Frank Gast, head of funding and financing sales for Eurex Repo, and Matthias Graulich, global head of strategy and product for fixed income, funding and financing for Eurex Clearing.
Nass and Addison will also become part of the newly formed Eurex Securities Transactions Services, which will be a subsidiary company of Deutsche Boerse that will offer the buy-in agent service.
Launching in the second half of 2020, the service will offer market participants an automated and standardised solution to meet the regulatory framework under CSDR.
The framework obliges the buyer in a securities transaction to initiate a buy-in process against the seller should the settlement of a transaction fail. This requires a neutral third party who acts as buy-in agent.
Subject to regulatory approval, the Deutsche Boerse buy-in agent service aims to close this gap and enable market participants to comply with the regulation on settlement discipline.
The potential destabilising effect of CSDR was a predominant theme at The Network Forum in June, with many wary of the liquidity effects the mandatory buy-ins would cause, as well as the potential costs of the settlement discipline regime.
A poll on the potential costs of the regime found that nearly half of delegates believe daily settlement fail penalties will cost €5 million per day, including admin costs.
Industry legend John Gubert highlighted that with an average of 600,000 transactions per day at the current settlement rate at 96.7%, it could mean nearly 18,000 trade fails per day.