T+2
EU Industry wide shortened
settlement cycle for securities
Client Guide – October 2014
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CSDR and T+2: harmonising securities
settlements practices in Europe
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.
Contents
Introduction
2
How are you
impacted by T+2
3
T+2 Scope
4
T+2 Key impacts
5
In scope T+2 market
details
6-18
What has driven the need for T+2?
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.
Summary
19
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). The Central Securities Depositories Regulation (CSDR)1,
when implemented, provides for an effective T+2 date of 1 January 2015, in
time for the launch of Target2-Securities (T2S) in June 2015.
1.
The T+2 requirement is stated in CSDR Art5(2)
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How T+2 will impact you
What benefits are
expected from T+2?
How will T+2 impact
your transactions?
• The CSD Regulation introduces a
common set of rules to
harmonise 'settlement
discipline' across the EU. These
consist of measures to prevent
settlement fails, and to address
these fails when they occur.
• 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.
• A shortened settlement cycle
would reduce the additional
margin and liquidity needs that
can happen during times of
economic volatility.
• Operational functions will be
subject to more focus across the
industry in the coming months
to ensure that firms are
prepared for the T+2 settlement
cycle.
• T+2 will help foster a reduction
of counterparty risk by moving
trades more quickly to
settlement, enabling capital to
be freed up faster for
reinvestment and reducing
credit and counterparty
exposure.
• The migration to a T+2
settlement period will be a
contributory factor in achieving
the wider ambitions of ‘Target2Securities’ (T2S), the European
Central Bank initiative to
streamline Europe's securities
settlement structure, which is
expected to go live in June 2015.
The migration to T+2 settlement
period is expected to:
• Reduce counterparty, market
and liquidity risks
• Increase automation of
operational processes across
organisations
• Reduce annual collateral
requirements, to free up capital
for investment.
• The impact of T+2 will not be
confined to Europe. Market
participants with clients or
counterparties outside Europe
will need to ensure that crossborder securities transactions
(e.g. 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 presettlement 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 crossborder 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.
Key T+2 market migration dates
(for those countries migrating to T+2 on 6 October 2014)
Trade date
Settlement date
Comments
2 October 2014
7 October 2014
T+3
3 October 2014
8 October 2014
The last trade day on T+3
6 October 2014
8 October 2014
The first trade day on T+2.
Settlement volumes for two
trading days on 8 October 2014
7 October 2014
9 October 2014
T+2
Key T+2 regulatory dates
*1 January 2015
CSDR Regulation applies to T+2 settlement
June 2015
Compliance with ‘Target2-Securities’ settlement
structure
*Or at least 6 months before any T2S migration but no later than 1 January 2016.
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T+2 Scope
The majority of European Economic Area (EEA2) markets are moving to the new T+2
settlement cycle for all transactions executed on trading venues. The CSD Regulation
includes some product exemptions and some countries may move at a different pace
than the majority.
What instruments are in
scope?
The regulators have provided inscope 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)3
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.
2.
3.
4.
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.
• International Bonds - ICMA have
recommended that all
International securities traded
OTC, for the in scope markets,
are to move to T+2.
Note: International Bonds (all XS
ISINs) will default to T+2, as per
infrastructure providers and
recommended by industry
working groups.
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).
Moving to T+2:
The state of play
28 markets have confirmed 6
October 2014 as their migration
date:
Austria, Belgium, Croatia, Czech
Republic, Cyprus, Denmark,
Estonia, Finland, France, Greece,
Hungary, Iceland, Ireland, Italy,
Latvia, Lithuania, Luxembourg,
Malta, the Netherlands, Norway,
Poland, Portugal, Romania,
Slovakia, Spain4, Sweden,
Switzerland and the UK.
Romania could migrate on 6
October 2014.
Bosnia & Herzegovina has
agreed to migrate on 1 January
2015.
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.
Bulgaria and Slovenia already
use T+2.
Liechtenstein has not yet fixed a
date for migrating to T+2.
EEA: European Economic Area includes the 31 European Union (EU) member states plus Iceland, Liechtenstein and Norway)
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.
The settlement lifecycle of equities is expected to change in Q4 2015, after the implementation of the Spanish Market Reform. Iberclear, the Spanish
central securities depository (CSD), has advised (on 7 May 2014) that the settlement cycle for fixed income trades booked in electronic platforms (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 debt trades. However, the settlement lifecycle of fixed income trades settling through the SCLV platform will not change in October 2014. It
has not been clarified yet whether the shorter settlement cycle will apply to the primary market.
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T+2 Key impacts
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.
Impacts on the trade life-cycle
Post-Trade
•
•
•
•
Affirmation
Pre-settlement matching
Manual processes
Time zone differences
Settlement
Fails Management
• One less day for margin
call calculation
• 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
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.
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.
Margin calls
There will be one less day for the
calculation of margin calls.
Corporate Actions
and Asset Services
• Close monitoring of
double settlement
(8 October 2014)
• No impact to Lending and
Borrowing rules
• Penalties – markets may
adopt different disciplines
Migration
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.
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.
Derivatives
Go to the HSBC T+2 website pages
to download Derivatives and T+2
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• 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
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.
Conversions: Equities
The move to T+2 will create a time
discrepancy between American
Depository Receipts (ADRs)
exchanged on the US 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.
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In scope T+2 market details
Austria
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
UniCredit Bank Austria AG
No impact.
Instruments in scope
Impact on buy-ins, settlement fines and any
other securities related market practices
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
No impact.
Additional information
CCP.A have confirmed that the netting algorithm does
not change due to the implementation of T+2
Useful websites:
www.oekb.at – Oesterreichische Kontrollbank AG
(OeKB) – Austrian Central Depository
www.fma.gv.at – Financial Markets Authority –
Austrian Capital Market Regulator
Croatia
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
Privredna Banka Zagreb
Zagrebacka banka d.d.
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.
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 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:
www.hanfa.hr – Croatian Financial Services
Supervisory Agency (HANFA)
www.skdd.hr – Sredisnje klirinsko depozitarno drustvo
(SKDD) – Croatian Securities Depository
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Cyprus
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
HSBC
•
Instruments in scope
All trades booked at the Cyprus Stock Exchange will
migrate to T+2 (from the current T+3)
•
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 subsystems to segregate on exchange settlement activity
per respective Trade Date.
.
•
•
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.
Useful websites:
www.cse.cy – Cyprus Stock Exchange
www.cse.com.cy – Central Depository and Central
Registry of Cyprus
Czech Republic
Sub Custodian (HSBC)
6 October 2014
Impact to Asset Servicing, Stock Lending and any
other products
UniCredit Bank
Ceskoslovenska obchodni banka
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.
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 (CDCP).
Impact on buy-ins, settlement fines and any
other securities related market practices
Buy-ins are not applicable for OTC transactions.
Useful websites:
www.centraldepository.cz (CDCP) – The Central
Securities Depository Prague
www.cnb.cz (CNB) – Capital Market Regulator
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Denmark
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
SEB
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.
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 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:
www.dbmf.dk – Danish Securities Dealers Association
www.finanstilsynet.dk - (FSA) – Danish Capital Market
Regulator
www.vp.dk (VP) - Danish Central Securities Depository
Estonia
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
SEB
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.
Instruments in scope
All quoted securities that are CSD eligible.
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:
www.fi.ee (FSA) – Estonian Financial Supervision
Authority
www.nasdaqomxbaltic (ECSD) – Estonian Central
Securities Depository
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Euronext
6 October 2014
Sub Custodian (HSBC)
Impact on buy-ins settlement fines and any other
securities related market practices
BNP Paribas
No impact to buy-ins.
Some markets may adopt a different settlement
discipline over the transition period.
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
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)
Impact to Asset Servicing, Stock Lending and any
other products
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.
Ex-date will be defined as one business day prior to
record date. Pay date will remain one day after record
date. There will be no impact to Stock Lending.
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:
www.euronext.com - Euronext
Finland
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
SEB
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.
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 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
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:
www.euroclear.com – Finland Central Securities
Depository
www.fin-fsa.fi (FSA) – Finland Financial Supervisory
Authority
Q&A document from Euroclear Finland:
https://www.euroclear.com/dam/EFi/Campaigns/T2_cycleQuestionsAndAnswers.pdf
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France
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
CACEIS
BNP Paribas
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.
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 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:
www.euroclear.com – Central Securities Depository
Greece
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
HSBC
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.
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.
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.
Impact on buy-ins, settlement fines and any
other securities related market practices
No impact.
Useful websites:
www.hcmc.gr – Hellenic Capital Market Commission
www.helex.gr – Depository for Greek Equities and
Corporate Bonds
www.bankofgreece.gr – Depository for Government
Debt
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Hungary
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
UniCredit Bankn
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.
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 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:
www.keler.com (Keler) – Hungarian Central Securities
Depository
www.fome.hu (FSA) – Hungarian Financial Supervisory
Authority
Iceland
6 October 2014
Landsbankinn
Impact to Asset Servicing, Stock Lending and any
other products
Instruments in scope
No impact.
Stock Lending is not permitted in Iceland.
Sub Custodian (HSBC)*
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).
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:
http://en.vbsi.is/BookentryIssues/IssuedISINnumber/
Useful websites:
http://en.vbsi.is/ - Icelandic Securities Depository
www.fme.is – Iceland Financial Supervisory Authority
*HSS does not currently offer a service in this market.
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Italy
6 October 2014
Sub Custodian (HSBC)
Additional Information
BNP Paribas
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.
In order to facilitate clients reconciliation process, BNP
Paribas, for instruments guaranteed by CC&G traded
on 3 October and 6 October with expected settlement
date 8 October, will calculate and book to client
accounts separate nets for each trade date.
BNP Paribas will process such trade date netting
algorithm for value date October 8 to guaranteed
instruments traded on the following markets: MTA,
MIV, TAH, ETFPlus, Idem, Domestic MOT, Euro MOT for financial instruments to be settled in Monte Titoli,
ExtraMOT - for financial instruments to be settled in
Monte Titoli, Euro TLX - for financial instruments to be
settled in Monte Titoli. Monte Titoli (due to the
operational impact and extra volumes anticipated as
part of the move to T+2) will not apply penalties on
fails on 8, 9 and 10 October 2014.
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 or 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.
Useful websites:
www.montetitoli.it – Italian Central Securities Depository
www.consob.it – Italian Capital Market Regulator
Latvia
6 October 2014
Sub Custodian (HSBC)
Impact on buy-ins, settlement fines and any
other securities related market practices
SEB
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.
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.
Useful websites:
www.nasdaqomxbaltic.com – Latvia Central Securities
Depository
www.fktk.lv – Latvia Financial Supervisory Authority
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Lithuania
6 October 2014
Sub Custodian (HSBC)
SEB
Impact to Asset Servicing, Stock Lending and any
other products
Instruments in scope
No changes to Asset Servicing deadlines anticipated.
No impact to stock lending.
The shortened settlement cycle will cover all securities
admitted to trading at all three Baltic exchanges and
respective First North Market.
Impact on buy-ins, settlement fines and any
other securities related market practices
No impact or changes to buy-ins and settlement fines.
Useful websites:
www.csdl.lt – Lithuania Central Securities Depository
www.lb.lt – Bank of Lithuania
Malta
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
Market not supported by HSBC
No impact
Instruments in scope
Impact on buy-ins, settlement fines and any
other securities related market practices
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.
No impact.
Useful websites:
www.borzamalta.com.mt – Malta Stock Exchange and
Central Depository
www.mfsa.com.mt – Malta Financial Services Authority
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13
Norway
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
SEB
No impact.
Instruments in scope
Impact on buy-ins, settlement fines and any
other securities related market practices
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.
No impact.
Useful websites:
www.vps.no – Norway Central Securities Depository
www.finanstilsynet.no – Norwegian Financial
Supervisory Authority
Poland
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
Bank Pekao SA
No impact.
Instruments in scope
Impact on buy-ins, settlement fines and any
other securities related market practices
The instruments affected by the shortened settlement
cycle are shares, rights to shares, Depository Receipts,
Exchange-Traded Funds (ETFs) and Investment
Certificates.
No impact.
Useful websites:
www.kdpw.pl – Poland Central Securities Depository
www.knf.gov.pl – Poland Financial Supervisory
Authority
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Romania
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
Citibank
No impact.
Instruments in scope
Impact on buy-ins, settlement fines and any
other securities related market practices
The settlement of BSE trades, trades executed on
alternative trading systems and outside of the regulated
market will follow the T+2 cycle.
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 onexchange transactions.
Useful websites:
www.bvb.ro – Bucharest Stock Exchange
www.cnvmr.ro – Romanian National Securities
Commission
www.depozitarulcentral.ro – Central Securities
Depository
Slovak Republic
Poland
Sub Custodian (HSBC)
6 October 2014
Impact to Asset Servicing, Stock Lending and any
other products
Ceskoslovenska
Bank Pekao SA obchodna banka
No impact.
Instruments in scope
Instruments
in affected
scope by the shortened settlement
The
instruments
cycle
are shares,
rights to shares,
Depository
Receipts,
The shortened
settlement
cycle will
affect trades
booked
Exchange-Traded
Funds
(ETFs)
and
Investment
in the electronic order book of the BSSE (Bratislava Stock
Certificates.
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-thecounter (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 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:
Useful websites:
www.cdcp.sk – Central Securities Depository of Slovak
Republic
www.nbs.sk – National Bank of Slovak Republic and
Market Regulator
www.kdpw.pl – Poland Central Securities Depository
www.knf.gov.pl – Poland Financial Supervisory
Authority
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Spain
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
BNP Paribas
No impact.
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 has not been
clarified yet whether the new settlement cycle will apply
to the primary market.
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:
www.iberclear.es – Spanish Central Securities
Depository
Sweden
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
SEB
The Swedish market is a record date market and exdate 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.
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 on buy-ins, settlement fines and any
other securities related market practices
No impact.
Additional Information
Q&A for Swedish market:
http://www.fondhandlarna.se/index.php/regler/cat_vi
ew/36-regler/218-t2
Useful websites:
www.euroclear.com – Swedish Central Securities
Depository
www.fi.se – Swedish Financial Supervisory Authority
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UK & Ireland
Switzerland
6 October 2014
Sub Custodian (HSBC)
Impact to Asset Servicing, Stock Lending and any
other products
UBS
Credit Suisse
No impact to the Asset Servicing or Stock Lending.
Impact on buy-ins, settlement fines and any
other securities related market practices
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.
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:
www.six-securities-services.com – Swiss Central
Securities Depository
www.finma.ch – Swiss Financial Supervisory Authority
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UK & Ireland
6 October 2014
Impact on buy-ins, settlement fines and any other
securities related market practices
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 the 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 = record 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.
Additional Information
No impact to tax services are expected.
CCPs 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:
www.fca.org.uk – Financial Conduct Authority
www.londonstockexchange.com – London Stock Exchange
www.euroclear.com – Euroclear UK & Ireland
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
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Summary: Market migration dates
• Slovenia
• Bulgaria
• Germany (for
exchange activity – OTC
transactions are currently
on T+3 and are
recommended to move to
T+2 as per ICMA
guidelines)
• Austria
• Belgium
• Croatia
• Czech Rep.
• Cyprus
• Denmark
• Estonia
• Finland
• France
• Greece
• Netherlands • Liechtenstein
• Hungary • Norway
• Iceland
• Poland
• Ireland
• Portugal
• Italy
• Romania
• Latvia
• Slovakia
• Bosnia & Herzegovina
• Lithuania • *Spain
• Luxembourg • Sweden
• Malta
• Switzerland
• UK
*Bonds only, equities not expected to change until Q4 2015
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