Eurex STS obtains German banking licence for Buy-in Agent service

Eurex Securities Transactions Services GmbH (Eurex STS) announced passing a key milestone required to offer Buy-in Agent services – obtaining a banking licence from the German Federal Financial Supervision Authority (BaFin).

The new regulation mandates that the buyer in a securities transaction must initiate a buy-in process against the seller, if the settlement of a transaction fails after a certain period and calls for a neutral third party to act as the Buy-in Agent. Eurex STS’ Buy-in Agent service will act as this third party and help market participants to comply with the new regulation. The new requirement aims to boost efficiency in the area of securities settlement by reducing the number of settlement fails that occur, for example.

Marcus Addison, Managing Director at Eurex STS commented:

Marcus Addison

We are delighted to have received the banking licence from BaFin, and we will continue to work towards launching our new service for the buy-in regime in February 2021. Our solution leverages our considerable experience in offering trusted securities trading infrastructure to the market – it will provide an automated and standardized solution to assist market participants with regulatory compliance.

Marcel Naas, Managing Director at Eurex STS said:

Securing the banking licence from BaFin is a significant event for us in the launch of this new service. We have been in contact with many potential clients who are interested in using our service and have been working with them to prepare and optimize their back-office functions in order to make the transition to the new settlement discipline regime as smooth as possible.

The new service will handle buy-in requests and with registered clients’ instruction, source the relevant securities in automated auctions and deliver them to the client on the same day.

The Eurex STS’ service will also handle a range of other functions such as notification management with the seller and CSD, the calculation and settlement of price differences and compensation and the fee compensation with the seller.

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