Central Securities Depositories Regulation and T+2

CSDR and T+2: harmonising securities settlements practices in Europe

Post the 2008 financial crisis, the European Commission (EC) decided that national Central Securities Depositories (CSD), in their position as key institutions performing the vital post-trade process of securities settlement, as well as maintaining records of securities accounts and transactions, needed to harmonise their practices and improve the safety and efficiency of transaction settlement.

Overview

Download brochure: T+2 EU Industry wide shortened settlement cycle for securities (PDF 1MB)

Download brochure: T+2 EU Industry wide shortened settlement
cycle for securities

Latest updates

As of 6 June 2016, the situation is as follows:

  • 29 markets have migrated to T+2 settlement cycle: Austria, Belgium, Bosnia & Herzegovina, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Spaini, Sweden, Switzerland, and the UK.
  • 1 market has not yet fixed a date for migrating to T+2 (Liechtenstein).
  • 2 markets already use T+2: Bulgaria and Slovenia.
  • 1 market (Germany) is already using T+2 for exchange activity. OTC transactions are currently on T+3 and are recommended to move to T+2, as per ICMA guidelines.

What has driven this regulation?

National Central Securities Depositories (CSDs) are key institutions that perform the vital post-trade process of securities settlement. In addition, they hold records of securities accounts and transactions. Following the 2008 financial crisis, the European Commission (EC) decided that CSDs needed to harmonise their practices and improve the safety and efficiency of transaction settlement.

In the vast majority of European markets, the settlement period for securities is currently the transaction date plus three business days, often referred to as T+3. The move to T+2 and a shorter settlement cycle would mitigate counterparty risk for all industry participants.

The European Commission set up the Harmonisation of Settlement Cycles Working Group in 2009. The group decided that T+1 would not work due to the high use of paper and low levels of straight-through processing in the industry. The group therefore recommended T+2, which would harmonise with foreign exchange settlement periods.

T+2 will harmonise securities settlement periods at a maximum of two business days after the trading day, (T+2) for certain securities transactions across the EU).

What benefits are expected from T+2?

In essence, the migration to T+2 settlement period is expected to:

  • Reduce counterparty, market and liquidity risks
  • Increase automation of operations processes within all market participants' organisation
  • Reduce annual collateral requirements, therefore freeing up capital for investment.

How does T+2 impact your transactions?

  • Market participants will now have one less day to complete the pre-settlement stages of the trade lifecycle with even greater focus required on positively affirming trade details on trade date.
  • Operational functions will be subject to more focus across the industry in the coming months to ensure that firms are prepared for the new T+2 settlement cycle.
  • The impact of T+2 will not be confined to Europe. Market participants with clients or counterparties outside Europe will need to ensure that cross-border securities transactions (i.e. euro-based bonds settling cross border) are also settled on T+2.

What will market participants be expected to do?

  • Adapt their own procedures to complete the pre-settlement stages of the trade lifecycle more quickly.
  • Comply with ‘same day affirmation’ or ‘SDA’ (verification of the trade on the same day the trade is executed) where possible.
  • Improve exchange of information and use electronic / automated solutions when possible for communication, payment or cheque clearing.
  • Ensure that their cross-border securities transactions (e.g. euro based bonds settling cross border) are also settled on T+2 when trading with counterparties outside Europe.
  • Ensure internal system and process readiness to support changes to the settlement cycles in time for the main 6 October 2014 go-live date.

Last updated: 1 August 2016

T+2 Scope

What instruments are in scope?

The regulators have provided in-scope products at a high level and the Association for Financial Markets in Europe (AFME) is providing a best practice guide of products. Article 4.1(18) of The Markets in Financial Instruments Directive 2004/39/EC (MiFID)1 refers to the notion of “transferable securities” as classes of securities which are negotiable on the capital market (except instruments of payment), such as:

  • Shares and other equivalent securities to shares in companies, partnerships or other entities and depositary receipts in respect of shares.
  • Bonds or other forms of securitised debt, including depositary receipts in respect of such securities.
  • Any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures.

The notion of “transferable securities” determined by MiFID should be used to determine what are in scope instruments for T+2.

In scope

  • Cash Equities
  • Fixed Income Instruments
  • Exchange Traded Funds (ETFs)
  • Warrants
  • Securities settlement stemming from derivatives contracts

International Capital Market Association (ICMA) recommends:

  • Repo transactions - Repos have been recommended to move to T+1 as per ICMA guidelines.
  • Eurobonds - ICMA have recommended that all International securities traded OTC, for the in scope markets are to move to T+2.

Out of scope

  • Primary issuance, Initial Public Offerings (IPOs) and grey market transactions (i.e. secondary market transactions prior to settlement of primary market allocations).
  • Undertaking for Collective Investment in Transferable Securities (UCITS).
  • Money Market Instruments (MMI).

1 MiFID: The Markets in Financial Instruments Directive 2004/39/EC (known as "MiFID") is a European Union law providing harmonised regulation for investment services across the 31 member states of the EEA.

Last updated: 19 August 2014

T+2 Impact

At a high level the operations during the life-cycle of a trade will have to be completed in two business days rather than three.

Latest updates

15 September 2014

Derivatives

Download brochure: Derivatives and T+2 (PDF 492KB)

Impacts on the trade life-cycle

Post-Trade
Settlement
Fails Management
Corporate Actions
and Asset Services
  • Affirmation
  • Pre-settlement
    matching
  • Manual processes
  • Time zone differences
  • One less day for margin
    call calculation
  • OTC settlement,
    recommended to be T+2
  • Static data
    management
  • Less time to determine funding requirements
  • Shorter window to
    recall stock from loan
  • CCP clearing functions
    are not expected to be
    impacted
  • Close monitoring of
    double settlement
    (8 October 2014)
  • No Impact to Lending
    and Borrowing rules
  • Penalties – markets
    may adopt different
    disciplines
  • Where Corporate Actions Joint Working Group (CAJWG) standards apply, events will move in-line with the new settlement cycle
  • No impact on General Meetings apart from France, where the snapshot of eligible holders will take place two days prior to the meeting, rather than three

Buy-ins

There are recommendations from the European Banking Federation (EBF), European Central Securities Depositories Association (ECSDA), ICMA and other industry associations, that the timing for the introduction or any changes to buy-ins and penalties should be phased in. Euroclear Bank are reviewing the recall period relating to the stock loan/borrow process, in line with changes in the settlement cycle to T+2.

Conversions

Fixed Income

RegS will take on a recommended T+2 settlement status. 144A securities will maintain T+3.

Consideration will need to be taken into account when booking both sides of this conversion to ensure that the dates are the same, as this will impact the cash value if they each default to different settlement cycles.

Equities

The move to T+2 will create a time discrepancy between American Depository Receipts (ADRs) exchanged on the American market and their underlying assets exchanged on European markets. ADR specialists have highlighted two key issues:

  • Conflicts in the US (T+3) and European (T+2) settlement cycles could result in incremental capital costs for US counterparties in cases where the broker will have to borrow/lend or require cash advances for its American investor client.
  • The discrepancy between the settlement cycles could complicate the payment of dividends and the determination of ex-dates.

Funding

Liquidity Management (and associated treasury functions), treasury managers will have one day less to ensure the necessary liquidity is present for settling the transactions of their institutions.

Timelines for FX transactions means firms will have less time to determine and place any FX trades that may be required to deliver the purchase currency without the need to borrow.

Margin calls

There will be one less day for the calculation of margin calls.

Migration

It is evident that there will be a spike in settlement on 8 October where T+3 and T+2 cross.

This spike in settlement activity will require close monitoring of system capacity, throughput of messaging, settlement fails, CSD handling of volume and liquidity management.

HSBC recommends that clients identify critical elements of their trade processing which will be required to fit within a shorter settlement cycle. Of particular importance for post-trade activities are the affirmation, allocation, confirmation processes and pre-settlement date matching.

Penalties and fines

In anticipation of T+2, Euroclear UK & 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 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.

Last updated: 15 September 2014

T+2 Market details

28 markets have confirmed 6 October 2014 as their date to move to T+2. Please see below for full country by country details.

Austria

Austria

Sub Custodian (HSBC)

UniCredit Bank Austria AG

Instruments in scope

All securities instruments traded on the joint trading platform XETRA, settled via the local central securities depository and cleared by the central counterparty, OeKB and CCPA.

Impact to Asset Servicing, Stock Lending and any other products

No impact.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional information

CCP.A have confirmed that the netting algorithm does not change due to the implementation of T+2

Useful websites:

Oesterreichische Kontrollbank AG (OeKB) – Austrian Central Depository
Financial Markets Authority – Austrian Capital Market Regulator

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Croatia

Croatia

Sub Custodian (HSBC)

Privredna Banka Zagreb
Zagrebacka banka d.d.

Instruments in scope

This change impacts all instruments traded on the Zagreb Stock Exchange i.e. Equities, Government Bonds, Municipal Bonds, Corporate Bonds, Commercial Paper and structured products (certificates). Please note that fixed income instruments are usually traded OTC and settled through the local CSD. The settlement period is agreed directly between the two counterparties.

Impact to Asset Servicing, Stock Lending and any other products

No impact to asset servicing.

Stock Lending is not developed in the Croatian market.

For Corporate Events with record date on or after 10 October 2014, the ex-dividend date will be calculated using the standard settlement period of T+2.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional information

Wednesday 8 October 2014 is a local holiday in Croatia. As a result, last T+3 and first T+2 settlements will cross on Thursday 9 October 2014

Useful websites

Croatian Financial Services Supervisory Agency (HANFA)
Sredisnje klirinsko depozitarno drustvo (SKDD) – Croatian Securities Depository

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Cyprus

Cyprus

Sub Custodian (HSBC)

HSBC

Instruments in scope

All trades booked at the Cyprus Stock Exchange will migrate to T+2 (from the current T+3).

Impact to Asset Servicing, Stock Lending and any other products

  • Ex-date for Corporate Actions will move from two business days before record date to one business day before record date.
  • The last day of trading which applies to conversions of shares from one category to another, e.g. a reverse split, will be set to two business days preceding the record date.
  • Last trading date = Record date -2 (previously Last trading date = Record date -3).
  • Stock lending is not permitted in Cyprus.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional information

OTC trades that currently support a Trade Date (TD) equal to or less than the Settlement Date (SD) without exceeding T+3 will now align their TD to be equal to or less than the SD without exceeding T+2.

There will be no netting across the two different trade dates. The CSE will provide different settlement sub-systems to segregate on exchange settlement activity per respective Trade date.

Useful websites

Cyprus Stock Exchange
Central Depository and Central Registry of Cyprus

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Czech Republic

Czech Republic

Sub Custodian (HSBC)

UniCredit Bank
Ceskoslovenska obchodni banka

Instruments in scope

All trades concluded on the Prague Stock Exchange. Shortened settlement period will apply to all securities that are traded on the joint trading platform XETRA, settled via the local Central Securities Depository (CSD) and cleared by the central counterparty (CCP).

Impact to Asset Servicing, Stock Lending and any other products

No impact to Asset Servicing or Stock Lending.

Stock lending is mainly operated through Repo transactions, or FoP transactions with separate cash payment agreed between counterparties.

The ex-date for local dividend payments will move to one day prior to record in line with the change of settlement period.

Impact on buy-ins, settlement fines and any other securities related market practices

Buy-ins are not applicable for OTC transactions.

Useful websites

The Central Securities Depository Prague (CDCP)
Capital Market Regulator (CNB)

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Denmark

Denmark

Sub Custodian (HSBC)

SEB

Instruments in scope

Applicable to any operations in transferable securities which are executed on trading venues and settled in on Regulated market, MTF or a OTF (if and when applicable). UCITS are not in scope, however, with regards to transactions in transferable securities executed on a trading venue, the intended settlement date shall be no later than on the second business day.

Impact to Asset Servicing, Stock Lending and any other products

Danish market is a record date market and ex-date is one settlement cycle – one business day before record date. This will not change however with the change in settlement period, ex-date will move one business day closer to record date.

No impact to Stock Lending.

Impact on buy-ins, settlement fines and any other securities related market practices

The buy-in period for failed transactions, the recycling rules and the lending and borrowing rules and processing will not be impacted by T+2.

Additional Information

FAQ Document is available via the Danish Bankers Association Danish Securities Dealers Association: www.dbmf.dk

All OTC transactions executed on a trading venue will be on T+2, unless both parties agree to a different date. OTC transactions outside a trading venue (even if reported to the exchange) are not included in T+2.

Useful websites

Danish Securities Dealers Association
Danish Capital Market Regulator (FSA)
Danish Central Securities Depository (VP)

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Estonia

Estonia

Sub Custodian (HSBC)

SEB

Instruments in scope

All quoted securities that are CSD eligible

Impact to Asset Servicing, Stock Lending and any other products

Impact to Asset Servicing is undecided at this stage. Booking of distributions will change (currently cash distributions are carried out by CSD directly to investor accounts). In future, cash distributions will move through a T2S Dedicated Cash Account (DCA).

No impact to Stock Lending. Whilst legally allowed, due to lack of procedural rules and appetite, it is not widely practised in the market. Similar functionality is executed mostly through Repo transactions.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact to buy-ins.

No impact to settlement fines.

Useful websites

Estonian Financial Supervision Authority (FSA)
Estonian Central Securities Depository (ECSD)

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Euronext

Euronext

Sub Custodian (HSBC)

BNP Paribas

Instruments in scope

All asset classes traded on the following regulated markets will adopt T+2:

  • Euronext Cash Markets UTP/TCS (Amsterdam, Brussels, Paris) i.e. ESES/EB/NBB – SSS
  • Euronext Cash Markets UTP.TCS (Lisbon) i.e. Interbolsa - Equiduct Market (Borse Berlin) i.e. EB/(ESES) Interbolsa
  • Luxembourg Market (Bourse de Luxembourg) i.e. EB/CBL – Bond/Match/ Galaxy Market (Trading Screen) i.e. EF/EB Interbolsa and Euroclear Belgium

Impact to Asset Servicing, Stock Lending and any other products

Ex-date will be defined as one business day prior to record date.

Pay date will remain one day after record date.

No impact to Stock Lending.

Impact on buy-ins settlement fines and any other securities related market practices

No impact to buy-ins.

Some markets may adopt a different settlement discipline over the transition period.

Additional information

Clearing – In accordance with the migration timetable, Tuesday 7 October 2014 EOD, LCH Clearnet SA will net trades per ISIN and per Delivery Account for trades from Friday 3 October and from Monday 6 October 2014 into a single settlement instruction for Intended Settlement Date 8 October 2014.

Clearing (Portugal) – Guaranteed trades: single file will be sent on the 7 October 2014 by LCH Clearnet SA to Interbolsa aggregating the two stock exchange dates, 3 and 6 October 2014. Non-Guaranteed trades: LCH Clearnet SA will send on the 3 and 6 October 2014 the trades of the two respective dates, Interbolsa will aggregate the two files with settlement to take place on 8 October 2014.

Useful websites

Euronext

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Finland

Finland

Sub Custodian (HSBC)

SEB

Instruments in scope

Applicable to all trades that settle in Euroclear Finland, if they are traded:

  • on a regulated market moving to T+2, such as NasdaqOMX Nordic (also including non-regulated First North markets)
  • on a Multilateral Trading Facility (MTF) or an Organised Trading Facility (OTF), is and when applicable,
  • for OTC the recommended cycle is T+2, unless both parties agree to a different date

Impact to Asset Servicing, Stock Lending and any other products

The change will affect corporate actions, if the record day follows the settlement cycle. After 6 October, the record day will follow T+2 cycle instead of T+3. After the settlement cycle change the record date of the dividend cannot be earlier than two trading days after the Annual General Meeting (AGM). Currently the record date cannot be earlier than three trading days after the AGM.

No impact to Stock Lending.

Impact on buy-ins, settlement fines and any other securities related market practices

No information has been provided. Intended Settlement date is referred to as regards buy in rules and settlement fines.

Additional information

Q&A document has been made available by Euroclear Finland

Clearing – HEXClear optimisation is not linked to Trade Date. All transactions that are booked for Settlement Date 8 October 2014 will be included in same ‘netting’

Useful websites

Finland Central Securities Depository
Finland Financial Supervisory Authority (FSA)

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France

France

Sub Custodian (HSBC)

CACEIS

BNP Paribas

Instruments in scope

T+2 settlement cycle includes any operation, settled in a CSD or ICSD, if traded on a regulated market or a MTF, or an OTF (whenever applicable) or an OTC market unless both parties decide otherwise.

Listed UCITs are included in the scope. Non-listed UCITs and Primary issues are out of scope.

On 20 August 2014, The Agence France Tresor (AFT) announced that trades of French Government Debt on secondary markets that are conducted through regulated markets must settle on a T+2 settlement cycle form 6 October 2014. As a result, ATF will settle all BTF, BTAN and OAT auctions on T+2.

Impact to Asset Servicing, Stock Lending and any other products

Annual General Meetings – record dates are currently positioned three days before the General Meeting based on traded transactions. A decision to leverage from the T+2 to align the French Market with the future European General Meetings standards has led to fix the record date two days before the General Meeting based on settled transactions.

No impact to Stock Lending.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional information

Clearing – In accordance with the migration timetable, Tuesday 7 October 2014 EOD, LCH Clearnet SA will net trades per ISIN and per Delivery Account for trades from Friday 3 October and from Monday 6 October 2014 into a single settlement instruction for Intended Settlement Date 8 October 2014.

Useful websites

Central Securities Depository

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Greece

Greece

Sub Custodian (HSBC)

HSBC

Instruments in scope

All Equities, Corporate Bonds, ETFs and Warrants booked in HELEX will migrate to T+2 (from the current T+3 for Equities and T+1 for Bonds) on effective date.

Impact to Asset Servicing, Stock Lending and any other products

Ex-date for Corporate Actions will move from 2 business days before record date to 1 business day before record date. The last day of trading which applies to conversions of shares from one category to another, e.g. the reverse split, will be set to 2 business days preceding the record date.

Last trading date = Record date -2 (previously Last trading date = Record date -3)

No impact to Stock Lending.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional information

Clearing – There will be no netting across the two different trade date. HELEX will provide two different settlement subsystems to segregate on exchange settlement activity per respective trade date. Priority will be given on 8 October 2014 to the settlement of those trades with a trade date of 3 October 2014.

Useful websites

Hellenic Capital Market Commission
Depository for Greek Equities and Corporate Bonds
Depository for Government Debt

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Hungary

Hungary

Sub Custodian (HSBC)

UniCredit Bankn

Instruments in scope

The shortened settlement period will apply to all securities that are traded on the joint trading platform XETRA, settled via the local central securities depository (CSD) and cleared by the central counterparty, KELER and KELER CCP.

Also applicable to the Equities section of the Budapest Stock Exchange and the BETA Market.

Impact to Asset Servicing, Stock Lending and any other products

Effective from 6 October 2014, the ‘cum date’ will be shifted from the current E-8 to E-7 for equities listed on the Budapest Stock Exchange. Consequently, E-7 will be the last day of trading when ownership rights related to the corporate event are bought and sold together with the securities. ‘E’ is equal to the date of the corporate event and the calculation is made based on business days.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional information

Clearing – KELER CCP will cross net the trades for 8 October 2014 i.e. there will be one cycle for on exchange clearing on that day.

Useful websites

Hungarian Central Securities Depository (Keler)
Hungarian Financial Supervisory Authority (FSA)

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Iceland

Iceland

Sub Custodian (HSBC)*

Landsbankinn

Instruments in scope

Applicable to all securities traded on its Main Market and First North Iceland. Please note that Fixed Income instruments will be lengthened by one day (currently T+1).

*HSS does not currently offer a service in this market.

Impact to Asset Servicing, Stock Lending and any other products

No impact.

Stock Lending is not permitted in Iceland.

Impact on buy-ins, settlement fines and any other securities related market practices

Changes in respect of buy-in rules will only apply to changes of settlement cycle from T+1 for fixed instruments to T+2 and for Equities from T+3 to T+2.

Additional Information

Eligible changes will be applicable to all instruments registered with the Icelandic Securities Depository. Details in the following link:
Issued ISIN number

Useful websites

Icelandic Securities Depository
Iceland Financial Supervisory Authority

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Italy

Italy

Sub Custodian (HSBC)

BNP Paribas

Instruments in scope

The shortened settlement cycle will apply to all trades on regulated markets and multilateral trading facilities (MTFs). This will affect the following financial instruments: Shares, pre-emptive rights, warrants, convertible bonds and market-related closed-end funds, government securities and supranational bonds, corporate bonds and other debt securities, securitised derivatives (certificates and covered warrant), exchange traded funds (ETFs) and exchange traded commodities and notes (ETCs/ETNs).

Impact to Asset Servicing, Stock Lending and any other products

No impact to the Asset Servicing.

No impact to Stock Lending.

Please note that the record date will move from Ex date +2 to Ex Date +1 and the payment date will move from Ex date +3 to Ex date +2.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional Information

The settlement cycle of the derivative contracts that provide the delivery of shares underlying the future and option contracts will also be harmonised to T+2.

Clearing – CC&G (Cassa di Compensazione e Garanzia) has confirmed that for the transition to T+2 they will combine trades for trade date 3 October 2014 and trade date 6 October 2014 into one single net with expected settlement date of 8 October 2014.

Cassa di Compensazione e Garanzia (CC&G) has confirmed that for the transition of the Italian market to T+2 settlement cycle and in line with their existing netting rules (i.e. value date netting), they will combine trades for trade date 3 October and trade date 6 October into one single net with expected settlement date 8 October 2014.

Useful websites

Italian Central Securities Depository
Italian Capital Market Regulator

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Latvia

Latvia

Sub Custodian (HSBC)

SEB

Instruments in scope

The shortened settlement cycle will cover all securities admitted to trading at all three Baltic exchanges and respective First North Market.

Impact to Asset Servicing, Stock Lending and any other products

No impact to Asset Servicing.

Stock Lending is not traditionally practiced in Latvia, Repos are utilised.

Impact on buy-ins, settlement fines and any other securities related market practices

The CSD / SE fee for a delay of the settlement date: EUR 70 + 0.1% transaction value per delay day (max EUR 500).

The service fee for the postponement of the settlement date due to the default of the transaction consist of fixed proceeding fee and added percentage of transaction value for every trading day (working day). This proceeding fee shall be paid as one off fee and added percentage shall be paid for every trading day by which the actual settlement date of the transaction differs from the initial settlement (Value) date of the transaction.

Useful websites

Latvia Central Securities Depository
Latvia Financial Supervisory Authority

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Lithuania

Lithuania

Sub Custodian (HSBC)

SEB

Instruments in scope

The shortened settlement cycle will cover all securities admitted to trading at all three Baltic exchanges and respective First North Market.

Impact to Asset Servicing, Stock Lending and any other products

No impact.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

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Malta

Malta

Sub Custodian (HSBC)

Market not supported by HSBC

Instruments in scope

T+2 settlement cycle will apply to the settlement of trades executed on the regulated market and settled in MaltaClear, in equities, corporate bonds, Malta Government Stocks, Treasury Bills and in any other financial instruments that may be traded in the future.

Impact to Asset Servicing, Stock Lending and any other products

No impact.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Useful websites

Malta Stock Exchange and Central Depository
Malta Financial Services Authority

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Norway

Norway

Sub Custodian (HSBC)

SEB

Instruments in scope

The shortened settlement cycle will apply to all trades in equities, equity certificates, exchange traded funds (ETFs), exchange traded notes (ETNs), fixed income and warrants at Oslo Bors, Oslo Axess and Nordic ABM.

It will also apply to all cleared derivatives traded at Oslo Bors and Oslo Connect, as the delivery of the underlying instrument will settle two days after the derivative is expired or exercised. In addition, derivatives cash settlements that are currently not settled on T+2 will change.

Impact to Asset Servicing, Stock Lending and any other products

Unknown at this stage.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Useful websites

Norway Central Securities Depository
Norwegian Financial Supervisory Authority

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Poland

Poland

Sub Custodian (HSBC)

Bank Pekao SA

Instruments in scope

The instruments affected by the shortened settlement cycle are shares, rights to shares, Depository Receipts, Exchange-Traded Funds (ETFs) and Investment Certificates.

Impact to Asset Servicing, Stock Lending and any other products

No impact.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Useful websites

Poland Central Securities Depository
Poland Financial Supervisory Authority

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Romania

Romania

Sub Custodian (HSBC)

Citibank

Instruments in scope

The settlement of BSE trades, trades executed on alternative trading systems and outside of the regulated market will follow the T+2 cycle.

Impact to Asset Servicing, Stock Lending and any other products

No impact.

Impact on buy-ins, settlement fines and any other securities related market practices

The market settlement fee of 0.0085 percent of trade value will not be applicable for settlement instructions related to the trade allocations made by local brokers against clients’ accounts at the local custodian. However the clients should note that this fee will be paid by the brokers for the settlement of the on-exchange transactions.

Useful websites

Bucharest Stock Exchange
Central Securities Depository

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Slovak Republic

Slovak Republic

Sub Custodian (HSBC)

Ceskoslovenska obchodna banka

Instruments in scope

The shortened settlement cycle will affect trades booked in the electronic order book of the BSSE (Bratislava Stock Exchange), as well as trades booked in BSSEs multilateral trading facility (MTF).

However, negotiated and repo deals that are only reported via the BSSE for settlement, and over-the-counter (OTC) trades that are settled directly at the Slovakian Central Securities Depository (CDCP) will continue to follow their current settlement periods, which can range from T+0 to T+15.

Impact to Asset Servicing, Stock Lending and any other products

No impact.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional information

The Debt and Liquidity Management Agency announced that primary market of state debt securities will move to T+2 settlement cycle from 6 October 2014.

Useful websites

Central Securities Depository of Slovak Republic
National Bank of Slovak Republic and Market Regulator

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Spain

Spain

Sub Custodian (HSBC)

BNP Paribas

Instruments in scope

Iberclear, the Spanish CSD, has advised that the settlement cycle for Fixed Income trades booked in electronic platform (e.g. SENAF, Brokertec, EuroMTS) and settled through CADE will change to T+2 as of 6 October 2014.

The change will affect the settlement of both private and public sector trades. However, the settlement lifecycle of fixed income trades settling through the SCLV platform will not change in October 2014.

It is still to be confirmed whether the new settlement cycle will apply to the primary market.

Impact to Asset Servicing, Stock Lending and any other products

No impact.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Additional Information

Please note that the settlement cycle for equities is not expected to change until November 2015, post Spanish Market Reform.

Useful websites

Spanish Central Securities Depository

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Sweden

Sweden

Sub Custodian (HSBC)

SEB

Instruments in scope

Applicable to any operations in transferable securities which are executed on trading venues and settled in an (I)CSD on a Regulated Market, MTF or an OTF meaning Cash Equity, Listed funds (ETFs) are in scope, domestic debt securities, International debt securities (Eurobonds) and securities settlement stemming from derivatives contract, convertible bonds listed on a regulated market and warrants.

The following securities are not applicable: UCITS funds, other investment funds, primary issuance (including trading on grey markets) repo transactions and NASDAQ OMX Nordic’s physically settled derivatives on government and mortgage bonds.

Impact to Asset Servicing, Stock Lending and any other products

The Swedish market is a record date market and ex-date is one settlement cycle – one business day before record date. This will not change but due to the settlement cycle moving from T+3 to T+2, ex- date will be moved one business day closer to record date.

No impact to Stock Lending.

Impact on buy-ins, settlement fines and any other securities related market practices

No impact.

Useful websites

Swedish Central Securities Depository
Swedish Financial Supervisory Authority

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Switzerland

Switzerland

Sub Custodian (HSBC)

UBS

Credit Suisse

Instruments in scope

The shortened settlement cycle will apply to all securities that are traded on SIX Swiss Exchange and SIX Structured Products Exchange and settle through SIX SIS, the Swiss Central securities depository.

Impact to Asset Servicing, Stock Lending and any other products

No impact to the Asset Servicing or Stock Lending.

Impact on buy-ins, settlement fines and any other securities related market practices

The existing Stock Exchange Regulation with respect to buy-ins and any other securities related market practice will remain unchanged. In order to allow for a smooth transition, SIX SIS will grant a fee holiday for the 'Late Settlement Regime' on 8 October, 9 October and 10 October 2014.

Useful websites

Swiss Central Securities Depository
Swiss Financial Supervisory Authority

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UK

Ireland

UK & Ireland

Sub Custodian (HSBC)

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

Additional Information

For more information on T+2 from Euroclear UK & Ireland go to:
www.euroclear.com/en/news-views/initiatives/t-2-settlement.htm

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.

Useful websites

Financial Conduct Authority
London Stock Exchange
Euroclear UK & Ireland

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Last updated: 3 October 2014