Settlement Process

BME CLEARING Fixed Income sends to T2S through IBERCLEAR the Settlement Instructions (SIs) to be settled with value date T (same day) in real time, and before 20:00 the resulting instructions of the Netting and Aggregation process, with Intended Settlement Date T+1 (Next Business Day).

The CCP will be the counterparty of all Instructions, using for that purpose, its own cash and securities accounts in IBERCLEAR/T2S.

In case there are insufficient securities balance to settle a sell instruction, T2S, depending on its settlement algorithms, will establish which buying instruction will or will not be settled.

BME CLEARING generates all SIs so they can be partially settled. The parameters for the partial settlement are those in the static data in T2S for Fixed Income:

  • Minimum unit of 100,000 euros cash.
  • Multiple settlement of 1,000 euros notional. 

In the Settlement of Instruction process, priority is taken into account, it means, the order in which the Instructions are settled according to the T2S criteria. BME CLEARING as Central Counterparty by the mere fact of being it is assigned the TOP priority. In this way, all Settlement Instructions that the CCP sends to T2S, will have assigned this priority by default. Only the Central Bank or Central Securities Depositories will have higher priority.

T2S will inform the CCP and the Settlement Participants about the status of the instructions when being settled and will also inform about the instruction status right after the settlement period. Unsettled instructions will remain in T2S for settlement in the settlement period or next cycle.

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