Custodians are still waiting for vital information to work out exactly how the penalties are calculated under CSDR.
The spike in settlement fails during this period could further encourage the industry to increase calls for regulators to reconsider a delay to the CSDR buy-in regime
The endorsement comes two months after the ESMA stated it would postpone enforcing CSDR's settlement discipline regime following an industry-wide lobby.
CSDR requires a neutral third-party to act as the buy-in agent, which Eurex STS aims to become through its new banking license.
The consensus among both buy- and sell-side firms is that the mandatory buy-in regime will have significant negative implications on Europe’s capital markets.
Asset managers and pension funds have expressed concerns the CSDR mandatory buy-in regime will impact liquidity and increase costs.
The newly formed Eurex Securities Transactions Services, a subsidiary company of Deutsche Boerse, will offer the buy-in agent service.
Incoming regulation requires a third-party buy-in agent in cases of settlement fail.
This rules will require firms that are taking on settlement themselves, and not through a CSD or sub-custodian, to report data on a quarterly basis.