What price is worth paying to reduce failed trades? According to the European Union’s central securities depositories regulation (CSDR), quite a big one.
The regulation is scheduled to implement a new mandatory buy-in regime in September 2020, and although market participants expect this to be delayed, it is unlikely to be by more than a few months.
It matters because the proposed framework is set to hurt market-making willingness and therefore liquidity, particularly in sectors that are already less liquid.
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