Sub Custodian (HSBC)
Instruments in scope
For the UK and Irish markets, transferable securities traded on UK/Irish based Recognised Investment Exchanges (RIEs), Multi-lateral Trading Facilities (MTFs), Organised Trading Facilities (OTFs) and settled in Euroclear UK & Ireland's CREST system are in scope.
T+2 will not apply to:
- Undertaking for Collective Investment in Transferable Securities (UCITS)
- Money Market Instruments (MMI)
- Primary issuance
Impact to Asset Servicing, Stock Lending and any other products
The period between the ex-date and the record date will be shortened by one day:
(ex-date = records date -1). This will usually fall on a Thursday, with the record date being on a Friday. It is expected that as a result of the shortening of the time between ex and record dates, the number of market claims generated will be reduced.
No impact to Stock Lending.
Impact on buy-ins, settlement fines and any other securities related market practices
In anticipation of T+2, Euroclear UK and Ireland (EUI) introduced new matching requirements with effect from 1 September 2014 whereby all trades will require to be matched by close of business on T+1 to avoid potential matching fines. This date aligns with the start of the Sept / Oct settlement discipline period. EUI proposes to introduce discounts (see below) into the regime across a number of settlement discipline periods to allow the market time to adjust to the new changes. EUI has also announced a settlement discipline 'holiday' on 8 October 2014 in anticipation of the extra volumes expected on this date.
The Matching Discipline Regime includes deliveries, residual deliveries and stock loans relating to the following CREST security categories:
- FTSE 100
- FTSE mid 250
- Irish Equivalent 100
- Irish Equivalent 250
- Other UK and Irish settleable
- Residual UK and Irish
From Monday, 1 September 2014, there will be a 100% matching target on T+1 for all qualifying transactions. In order to allow clients time to adjust to the new target, EUI is taking a phased approach to implementation:
September and October 2014 (Period 97) ‐ 50% discount on matching fine total charge
November and December 2014 (Period 98) ‐ 25% discount on matching fine total charge
January and February 2015 (Period 99) and after ‐ Full matching fines ‐ No Discount
For more information on T+2 from Euroclear UK & Ireland go to:
No impact to tax services are expected.
CCP's will continue to adopt trade date netting over the transition period. Therefore, participants will have two settlements in the same instrument on 8 October 2014.
Financial Conduct Authority
London Stock Exchange
Euroclear UK & Ireland