Go­ing from T+3 to T+2 for cash trans­ac­tions

Financial Mirror (Cyprus) - - FRONT PAGE -

In re­sponse to the Cen­tral Se­cu­ri­ties De­pos­i­to­ries (CSD) Reg­u­la­tion and the pro­vi­sion to mi­grate the stan­dard set­tle­ment cy­cle for cash trad­ing from trade date plus three busi­ness days (T+3) to trade date plus two busi­ness days (T+2), a num­ber of oper­a­tors of Euro­pean se­cu­ri­ties mar­kets have an­nounced that they will im­ple­ment this mi­gra­tion with ef­fect from Oc­to­ber 6.

The T2S Har­mon­i­sa­tion Steer­ing Group has pub­lished a state­ment of pro­pos­als to the com­pe­tent au­thor­i­ties for pos­si­ble fur­ther ac­tion, ac­cord­ing to the In­ter­na­tional Cap­i­tal Mar­ket As­so­ci­a­tion (ICMA).

The CSD Reg­u­la­tion states that the mi­gra­tion should not ap­ply to trans­ac­tions that are pri­vately ne­go­ti­ated and ex­e­cuted on a trad­ing venue, or trans­ac­tions that are ex­e­cuted bi­lat­er­ally but are re­ported to a trad­ing venue. Al­though trans­ac­tions on the “ICMA mar­ket” are out of the scope of the CSD Reg­u­la­tion, as they are trans­ac­tions in in­ter­na­tional se­cu­ri­ties, in­tended to be traded on an in­ter­na­tional cross bor­der ba­sis through an in­ter­na­tional CSD or ICSD, which are of­ten ne­go­ti­ated bi­lat­er­ally and may be nei­ther ex­e­cuted on, nor re­ported to, a trad­ing venue, ICMA will change the stan­dard set­tle­ment cy­cle set out in the ICMA rules and rec­om­men­da­tions from T+3 to T+2 un­less other­wise agreed, to al­low for the or­derly trad­ing of all fixed in­come se­cu­ri­ties traded un­der ICMA rules.

Fur­ther, as re­viewed by ICMA’s Euro­pean Repo Com­mit­tee, se­cu­rity fi­nanc­ing trans­ac­tions such as re­pur­chase agree­ments will also mi­grate from the stan­dard of trade date plus two busi­ness days (T+2) to a stan­dard of trade date plus one busi­ness day (T+1), un­less spec­i­fied other­wise. Both these ICMA changes will take ef­fect from Oc­to­ber 6, the date on which the ma­jor­ity of Euro­pean mar­kets are to make the mi­gra­tion.

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