83,540
edits
Buy-in: Difference between revisions
Removed redirect to Buy-In - GMSLA Provision
Amwelladmin (talk | contribs) (Redirected page to Buy-In - GMSLA Provision) |
Amwelladmin (talk | contribs) (Removed redirect to Buy-In - GMSLA Provision) Tag: Removed redirect |
||
| Line 1: | Line 1: | ||
{{a|contract|}}{{d|Buy-in|/baɪ ɪn/|n|}}A [[self-help remedy]] in the securities markets where a market counterparty is unable to perform its obligations to deliver securities under an existing transaction, such as a securities sale or a [[stock loan]]. Since the selliung counterparty is failing to pony up what it owes — and by the way this may not be the counterparty’s fault: it may be the wrong end of an upstream fail, or there may be a general market dislocation — the buyer takes matters into its own hands and “buys in” from another source to satisfy its own requirements. | |||
This has two consequences: firstly — assuming the buy in settles — the buyer no-longer needs the securities it originally bought from the failing seller. So the failing seller is stuck with these. Secondly, the ''price'' at which the buyer executes the buy-in transaction will almost certainly differ from price agreed for the original failed trade. The buyer can pass its loss on to the failing seller. | |||
=== [[Central Securities Depositary Regulation]] mandatory buy-ins === | |||
Under the CSDR a mandatory buy-in process starts automatically 4 business days after the originally intended settlement date (for liquid equities<ref>As to which see Article 4(6)(b) of [[MiFIR]].</ref>) and 7 business days for other equity and debt securities. | |||
Where a buy-in isn’t possible, there is a cash compensation. | |||
{{sa}} | |||
*[[Securities financing transaction]] | |||
*{{gmslaprov|Buy-in}} under the {{gmsla}} | |||
{{ref}} | |||