DVP Settlement Will Mitigate Risk of Loss of Assets
OREANDA-NEWS. December 21, 2010. With effect from December 27, 2010 Participants of Depository Clearing Company (hereinafter DCC) can settle trades on Delivery Versus Payment basis (hereinafter DVP) via DCC's interdepository securities account with Euroclear Bank, Brussels (hereinafter Euroclear), an international settlement and clearing institution.
DVP settlement will mitigate the risk of the loss of assets.
To settle trades on DVP basis in Euroclear, a Participant shall open a separate cash account with NKO RTS Settlement Chamber (OOO) and provide DCC with a Confirmation of Registration of Accounts for DVP settlement in Euroclear Bank (Appendix 1 to Specification of Details of Depository Transactions (Deposition and Withdrawal) on Delivery Versus Payment Basis via the Inter-depository Link with Euroclear Bank (hereinafter Specification). Participants shall also submit the documents enlisted in Par. 4 of the Specification.
Participants can settle DVP trades in Euroclear via their main securities accounts and via RTS trading sub-accounts with DCC. Currently trades are only settled in US dollars.
To submit instructions for such transfers to DCC, Participants using “DCC-Client” software should upgrade such software to version 3.0.22 (the guidelines for software upgrade will be published in the Remote Access System section of DCC web-site not later than December 27, 2010) .
Procedure of indication of Euroclear as the place of settlement in a DVP instruction
To choose DVP settlement in Euroclear, please complete the following respective fields in the instruction to be submitted to DCC:
Submit instruction D15 (interdepository deposition/withdrawal on DVP basis, indicate ‘Euroclear Bank' or the BIC-code of Euroclear in the ‘Place of Settlement' field) in paper form;
For instructions submitted via DCC-Client software, select ‘Correspondent Depository' as the ‘Place of Settlement', select ‘Delivery Versus Payment' in the ‘Type of Settlement' window, select ‘EuroClear' in the window that opens;
If the instruction is submitted via DCC's remote access system (MT521/523 format), indicate the code of the settlement institution (i.e. Euroclear Bank);
Submit an instruction in МТ541/543 format via S.W.I.F.T. with the indication of the BIC-code of Euroclear (MGTCBEBE).
Deadlines for acceptance and execution of instructions
All types of DVP instructions to be settled in Euroclear shall be accepted for execution on the same-day basis if they are submitted to DCC before 6 p.m. Moscow time.
In case an instruction for delivery or for receipt is submitted to DCC electronically, a report on execution of the instruction shall be forwarded to the Participant immediately upon receipt of a respective report from Euroclear. The Settled Trades Report is provided to Participants after the end of DCC's operating day.
Participants' expenses for DVP settlement in Euroclear shall include the following:
DCC fees – no fee is charged for deposition of securities to DCC's interdepository securities account with Euroclear, fee for securities withdrawal shall be charged in accordance with the following paragraphs of DCC Fee Schedule:
Fee for Eurobonds shall be equal to that for corporate bonds and be charged in accordance with Par.1.4.2;
Transactions with ADRs and GDRs shall be subject to the same fees as transactions with shares, i.e. Par.1.4.1;
Euroclear fees – DCC Participants shall reimburse DCC's expenses related to transactions on DCC's securities account with Euroclear. Euroclear Fees are available at the web-site of Euroclear.
Detailed information on completion of instructions and DVP settlement via the interdepository link between DCC and Euroclear can be found in the Specification enclosed to this notification.
Should any questions relating to this message arise, feel free to contact your account manager at DCC.
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