Clearstream will roll out a primary Delivery Versus Payment (DvP) settlement service for syndicated issuances on 14 March 2022.
The platform replaces the current offering where payment of issuance proceeds flow independently from the credit of securities. The new service allows for settlement between the lead manager and the investor’s in Clearstream’s books while streamlining the payment, minimising risks between all parties and collateral consumption by lead managers.
Common depositories can now allow the initial deposit of the securities with Clearstream without an “irrevocable commitment to pay” which formerly had to be released by Clearstream to the Common Depository/Common Service Provider.
The new settlement model has been developed with Euroclear Bank and has support from the International Capital Market Association (ICMA) and the International Capital Market Services Association (ICMSA), as well as players active in syndicated issuances.
Through the new service, Clearstream has promised enhanced issuer protection, new settlement workflow and various operational changes. From 14 to 30 April 2022, Clearstream will not charge any fees for the new platform.
Earlier this month, Clearstream announced that it would no longer be settling rouble-denominated transactions, in response to Russia’s military action in Ukraine. Internal and domestic settlement in all securities held on Clearstream Banking’s Depository were also closed until further notice