Banca d’Italia, in accordance with Consob, yesterday approved the operational rules of Express II, the new platform that will replace the present Liquidazione dei Titoli (managed by Banca d’Italia). Express II, developed in agreement with industry associations, intermediaries and markets, integrates netting and gross settlement functionalities.
The netting functionality of Express II is structured in two different cycles, a night cycle and a day cycle. It also provides different mechanisms for the maximization of the operations to settle and allowing the elimination of “assegnazioni” (mandatory securities borrowing). Securities lending and automatic collateralisation complete the set of available operating instruments enabling intermediaries to optimise their liquidity.
Express II combines the benefits of net and gross settlement, in particular in connection with fails management: failed transactions resulting at the end of the day cycle are resubmitted to the gross settlement platform.
The introduction of a netting night cycle will anticipate the settlement finality to the first hours AM of the settlement day, allowing the Italian financial system to have at its disposal a highly efficient clearing and settlement platform, completely in line with the most advanced international standards.
The new Express II platform has been already presented to the financial operators – in its overall architecture – in the course of domestic and international meetings and seminars.
Tests to be performed between Monte Titoli and Banca d’Italia, and between Monte Titoli, Banca d’Italia and intermediaries are planned to start during the first quarter of the next year.
The launch of the new net settlement service is expected to take place within the second quarter of 2003.