The VP board of directors has agreed to implement a new structure for the maintenance of a high-settlement ratio in the Danish market, according to custodian SEB.
The new sanctions for late settlement will be based upon the monthly average settlement ratio in VP. The company will create monthly statistics detailing the settlement ratio of all participants involved. The participants consist of account holders with one or several securities accounts and account holders with monthly transaction volumes of 500 or more.
These statistics will then be sent to the relevant agent banks for further distribution to the participants themselves. The average ratio will conform to a benchmark, and any participant with an average lower than the benchmark, -1.5%, will be reported to the custodian during the initial bank days of the following month. Certificates and bonds will have a separate benchmark and will be included at a later date.
A high settlement ratio in an efficient and smoothly running market is of interest for all market players, SEB said in a statement.
The new rules stipulating VPs new sanctions for late settlement become effective as of July 1 with a three-month test period.
The information will be published by the end of each month on VPs closed website.
SEB will also keep striving toward improving any element of measurement, including the settlement ratio, SEB said in a statement.
VP has come up with four approaches to follow up if the settlement ratio is lower than the -1.5% benchmark set in place, starting with a continuous three-month period when VP will contact the agent bank. All initial contact by VP will take place via the relevant agent bank.
(CM)