ICE Clear Netherlands Regulation Buy-in Procedure

Transcription

1 ICE Clear Netherlands Regulation Procedure 5 December, 2016 This material may not be reproduced or redistributed in whole or in part without the express, prior written consent of Intercontinental Exchange, Inc. Copyright Intercontinental Exchange, Inc All Rights Reserved.

2 pursuant to articles 3.9 and 10.4 of the Rulebook REGULATION BUY-IN PROCEDURE Capitalised terms used in this Regulation, and not otherwise defined, shall have the meaning as set out in the Rulebook. This Regulation comes into force on 5 December s will only be triggered for non-deliveries of Securities by the Clearing Participant. Non settled receipts due to lack of funds from the Clearing Participant will be subject to the fail management fees as specified in the Regulation Fees and Penalties. 1 GENERAL PROCEDURE 1.1 Schematic overview of a buy-in procedure. ICE Clear Netherlands ( ICNL ) will make a buy-in announcement on Date +4 Clearing Days, and will perform the actual buy-in on Date +5 Clearing Days. Fail Management procedure Buy in procedure auction Delivery bought shares SD SD+1 SD+2 SD+3 SD+4 SD+5 Noticatification Deadline for receives failing party Determin e Closing Price TP s TP s The latter could result in a so called Early. ICNL reserves the right to postpone the start of a buyin procedure at its own discretion. Clearing Participants however, do not have a possibility to initiate a buy-in against ICNL. If the buy-in auction should be performed on a Date which is not a Trade Date (see Regulation Clearing Days), the buy-in auction will take place on the next Trade Date 1.2 notification The buy-in date is calculated from the original buyer s perspective. Therefore, it is possible that for the Appointed Clearing Participant the buy-in date is earlier than Date +5 Clearing Days. ICNL will inform the Appointed Clearing Participant by and/or fax about the upcoming buy-in. At the end of Regulation procedure v Page 2

3 Date +4 Clearing Days, the closing price for the Securities which are due to be delivered is determined by the Exchange. ICNL will use this closing price to determine the maximum buy-in price. On Date +5 Clearing Days, ICNL will publish an announcement on its website, including the deadline for receiving offers and informs its Clearing Participants. The Clearing Participants will be requested to make an offer for a buy-in price. The maximum buy-in price is the maximum buy-in offer percentage over (i) the closing price on Date +4 Clearing Days, or if applicable, (ii) the last traded price adjusted for a corporate action. For this percentage, see table 1 under execution ICNL will grant the buy-in to the Trading Participant which offers the best price on the deadline set out in the announcement. If two or more Trading Participants have offered the same best price, the first in first out principle will apply. This means that the buy-in is granted to the Trading Participant which placed the best offer first. If the first offer covers only part of the whole settlement, the next Trading Participant in line with the best offer, will be assigned by ICNL for the remaining Securities. The Trading Participant with which a buy-in transaction is concluded, will be required to deliver the Securities via DVP or, in exceptional cases, through a free-of-payment delivery and separate payment on the day of the buy-in, into a separate account at the CSD (for the settlement details of buy-ins, please see table 2 under 3). The following actions will consequently be taken: - The original buyer is obliged to cancel the original settlement instruction and will need to instruct the CSD for the failed quantity and the original price for receipt/payment in its account with the CSD. - The Appointed Clearing Participant will be debited for the difference between the original price of the failed settlement and the buy-in price, if this buy-in price is higher than the original price of the failed settlement. 2 Sell out If a settlement instruction is still failing due to lack of cash or incorrect instructions by the receiving participant on S+5, ICNL will start the Sell-Out procedure. ICNL may employ a broker for the sell out process or offer the position for tender (as reverse of the buyin) to the Clearing Participants on its own discretion. The failing participant will on the processing date be informed about the Sell-out and will receive an overview after the execution detailing all additional costs. The participant is obliged to pay these costs within 2 business days. Regulation procedure v Page 3

4 3 BUY-IN SPECIFICS Table 1 CSD Cycle Notification of buy-in Start of buy-in Max. buy-in Offer Percentage Cash settlement percentage Euroclear NL Trade Date+2 Clearing Days Date +4 Clearing Days Date +5 Clearing Days 120% 120% Table 2 CSD details for buy in instructions: Dutch Stocks Belgium Stocks French Stocks Euroclear Nederland CDS participant account: 186 Beneficiary account: Place of settlement: NECINL2A Euroclear Belgium CSD participant account: 186 Beneficiary account: Place of settlement: CIKBBEBBXXX Euroclear France CSD participant code:186 Beneficiary account: Place of settlement: SIVCFRPPXXX 4 Corporate actions If the position that is bought in is entitled to a corporate action, ICNL will handle the corporate action in the buy-in procedure as well. This means that the delivering participant will still have to compensate ICNL for the proceeds if a trade has been bought in. In case of an optional event, the delivering participant is obliged to deliver the choice of the failing receiving participant. In case of a right issue ICNL will in general not start the buy in process on S+4 for rights but will have the possibility to do so at its own discretion. 5 instructions In case of a partial buy-in, the Appointed Clearing Participant is obliged to send a settlement instruction to the CSD for the delivery of the remaining Securities after the buy-in. For details CSD, please see table 2 under 3. 6 Fees Fees will be charged as specified in the Regulation Fees and Penalties. Regulation procedure v Page 4

5 7 Cash If there is no valid offer for a buy-in, if only a valid offer for part of the requested buy-in quantity has been received or if a buy-in is impossible for any other reason, the outstanding or remaining obligation to deliver may be settled in cash by ICNL. Cash settlement is processed by cancelling the original settlement and replacing it with a cash payment. The basis for a cash settlement will be (i) the closing price of the most recent Clearing Day prior to the buy-in or (ii) the last trade price adjusted for a corporate event of the relevant Securities. The maximum cash settlement percentage (see table 1 under 3) will be applied to this price to establish the cash settlement price. (EUR) TARGET2 Account ICE Clear Netherlands NL21FLOR In the case of cash settlement, the following actions will be taken: - the original buyer will be credited for the difference between the original price of the failed settlement and the cash settlement price, if the cash settlement price is higher than the original price of the failed settlement. - the Appointed Clearing Participant will be debited for the difference between the original price of the failed settlement and the cash settlement price, if the cash settlement price is higher than the original price of the failed settlement. Regulation procedure v Page 5