Exchange transactions in CCP-eligible securities must be fulfilled on the second clearing day after the conclusion of the trade (settlement day is t+2).
Procedure in the Event of Default on Delivery
In the event of default of delivery, the clearing house proceeds according to the following steps:
- Extension period
- Buy-in process
- Cash settlement
Based on § 100 BörseG 2018 the defaulting Clearing Member is obliged to pay penalty interests from the amount outstanding for the duration of the default in delivery pursuant to §§ 35 (8) and 55 (1) of the CCP.A General Terms and Conditions of Business.
During the extension period, a defaulting Clearing Member can arrange for the coverage of the shortfalls or instruct CCP.A to obtain coverage for the shortfalls. CCP.A tries to procure the missing quantity by contacting potential sellers directly as well as by means of an announcement on our website. The buy-in instruction should be made as early as possible in written form, per fax or per e-mail.
Depending on the various instruments traded on the Vienna Stock Exchange, clearing and settlement takes place after two different clearing cycles. The settlement period of T+2 and the risk management model remain unaffected. The settlement period is the period of two trading days between the day of the business transaction (T) and the settlement day (S).
Clearing cycle for CCP-eligible shares, where the principal trading venue is located in the European Union
This clearing cycle rests on an extension period until S+4, which is applicable for CCP-eligible shares whose main trading place is within the European Union and starts at S in the first booking run:
Clearing cycle for CCP-eligible shares, where the principal trading venue is located in a third country and other CCP-eligible securities (bonds, ETFs, certificates, warrants)
The distinction to the longer clearing cycle is based on a longer extension period in accordance Article 37 Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) from S+4 to S+7 for the following financial instruments listed at Vienna Stock Exchange:
- other CCP-eligible equities, where the principal trading venue is located in a third country (Article 16 Regulation (EU) No 236/2012)
- other CCP-eligible securities (bonds, ETFs, certificates, warrants)
This longer extension period provides the Clearing Participants with additional settlement days to fulfill their delivery obligation, before a buy-in process is initiated. This contributes to significantly reducing the risk of cash settlements for our clearing participants, which leads to a general improvement of the settlement efficiency.