A-Team Insight Blogs

UK Opts Out of CSDR Buy-in, SFTR Reporting

Share article

In a written statement outlining a series of regulatory reforms planned for the UK, Chancellor Rishi Sunak confirmed last week that the UK will not include the Central Securities Depositories Regulation’s (CSDR) settlement discipline regime as part of its adoption of EU regulations post Brexit. Instead, UK firms should “continue to apply the existing industry-led framework”.

The move was widely welcomed by the industry, with the International Capital Market Association (ICMA) commenting in a statement: “The announcement of HMT that they will not be implementing this aspect of the CSDR is a positive step, as is the comment that UK firms should continue to rely on the existing industry-led framework, and that any new regime in the UK will be developed through dialogue with industry, with sufficient time provided to prepare for implementation.”

Whilst supporting settlement discipline overall, ICMA has long warned of the negative consequences of the mandatory buy-in element of the CSDR on the functioning of the debt capital markets, and plans to respond to the current ESMA survey on topics for its CSDR review recommending that the mandatory buy-in regime is not implemented as planned.

However, it should be noted that UK trading entities, along with all third country trading entities, are still likely to be brought into the scope of CSDR as it applies at EU settlement level and requires trading parties to put enforceable contractual arrangements in place importing the mandatory buy-in regime.

The chancellor also confirmed that the UK would not be adopting the EU SFTR reporting requirement for non-financial counterparties, due to come into force from January 2021. “Given that systemically important NFC trading activity will be captured sufficiently through the other reporting obligations that are due to apply to financial counterparties, it is appropriate for the UK not to impose this further obligation on UK firms,” he said.

The Treasury launched a Financial Services Future Regulatory Framework Review in 2019 and plans to launch a consultation on the next phase of the review by the end of 2020.

Related content

WEBINAR

Recorded Webinar: Overcoming the Barriers to Implementing RegTech Solutions: The View from Either Side of the Fence

RegTech holds the promise of targeted, agile and often low-cost solutions to the real-world problems faced by financial institutions across the board. So why is it so difficult to get RegTech projects off the ground? RegTech solutions providers complain that it’s difficult to get access to decision-makers, and even when they do it’s tough to...

BLOG

New Solutions Emerge to Help Firms Address SRD2 Issues

A surge of new solutions is emerging to help firms meet the data challenges of Shareholder Rights Directive II (SRD2), which came into force on September 3, 2020 despite pleas from the industry for a delay due to Covid-19 pressures. “We ask you to consider, as a matter of urgency, a delay in the implementation...

EVENT

TradingTech Summit London

The TradingTech Summit in London brings together European senior-level decision makers in trading technology, electronic execution and trading architecture to discuss how firms can use high performance technologies to optimise trading in the new regulatory environment.

GUIDE

Regulatory Data Handbook 2020/2021 – Eighth Edition

This eighth edition of A-Team Group’s Regulatory Data Handbook is a ‘must-have’ for capital markets participants during this period of unprecedented change. Available free of charge, it profiles every regulation that impacts capital markets data management practices giving you: A detailed overview of each regulation with key dates, data and data management implications, links to...