The CSD in Athens has decided against extending the local settlement deadline to 20:00 hours local time. It will stay open until 16:00 local time only, which means it is still prior to the closing of cash market payments via the TARGET RTGS system.
“Currently trades that have not being confirmed for settlement by the local custodian until 13:30 local time on settlement date, are returned to the local broker and fail,” says a spokeswoman fore EFG Eurobank in Athens. “This may happen due to lack of instructions or erroneous instructions provided by the end client to the local custodian or due to an erroneous shift by the local broker to a local custodian.”
She says the new procedure, once implemented, will provide an additional opportunity for the local brokers to re-shift a trade (further to the existing “window” on T+2) to the correct local custodian between 13:30 until 16:00 local times on settlement date (T+3). It will also afford an additional 2 1/2 hours to local custodians to receive correct instructions from the end-client and settle a trade up to 16.00 hours local time.
“In the case that a local custodian has failed to settle a trade by 16.00 local time on settlement date, the trade will return to the local broker who will use the newly announced products for failed trades coverage,” adds the EFHG Eurobank spokeswoman. “In other words, STRAs, the settlement package Spot 1, settlement package Spot 2.”
She adds that the new timetable cannot start until amendments are made to the regulations of the Athens stock exchange, the CSD, and the Athens Derivatives Exchange Clearing House (ADECH). “For these changes, the relevant approval of the Hellenic Capital Market Commission is required, as well as a change in the regulation governing the operation of the Dematerialized Securities System (DSS),” she says.