Post Trade Services for NYSE BondMatch™ 20 January 2011
General PTS scheme • NYSE BondMatch ™ platform will be connected to LCH.Clearnet SA clearing house which will: Become Central CounterParty (CCP); Send the relevant Delivery Versus Payment (DVP) instructions to the National and International Central Securities Depositories (NCSDs and ICSDs). • Upon NYSE BondMatch ™ start in March, A first interim settlement solution will be available; Later on a target settlement solution will be put in place. 2
Securities characteristic & trade capture • Securities admitted both on existing market and the “Cassiopeia” MTFs (e.g. NYSE BondMatch ™ ) may have different characteristics: “Cassiopeia” products will receive specific trading code starting with “BO” . They will not be fungible with NYSE Euronext / Bourse de Luxembourg Cash products; Position will be managed on distinct Position Account and Delivery Account for the new clearing segment “Cassiopeia” ; Margin Account and Risk calculation will be specific to “Cassiopeia” products. 3
Expression of the Quantity – FMT / UNT • From trading to clearing, all “Cassiopeia” eligible securities will be managed in FMT, including French corporate bonds: One listing / trading in FMT for the NYSE BondMatch™ “Cassiopeia” market; One listing / trading in UNT for the French Cash market. • French products settling in EF will be expressed in UNT (in EF reporting only) temporarily until the completion of the UNT/FMT migration project on the French market. Settlement in EB will be done in FMT as today. • Clearing model will follow current CNS principle, will settle at trade date + 3 and will be sent at ISD-1 evening to the settlement platforms. End of day fails are reinserted in the next netted position to be settled the next day. 4
Interim PTS solution: March 2011 (1/2) NYSE BondMatch ™ Trading Trading Member Member Transactions LCH.Clearnet SA Transactions validation Positions management Clearing Corporate events Clearing Member Netting and Delivery vs payment instructions Members Risk management and margin call Fails, buy-in and default management Audit trails Reporting Net instructions Net instructions InterBolsa Settlement Settlement Agent Agent Euroclear France Euroclear Bank Euroclear Belgique Euroclear Netherland Realignment to be made by the client Clearstream Banking 5 Luxembourg
Interim PTS solution: March 2011 (2/2) • The clearing member will need to have an account within the relevant NCSDs/ICSDs directly or indirectly via a settlement agent: Securities admitted in the NCSD ( EF, ENL, EB ) can be settled at the choice of the member in the NCSD or in EB ; Portuguese Securities will settle in Interbolsa ; Other foreign securities will settle in EB . • Once delivered in the above mentioned entities the bonds could be re- delivered by the clearing member (or its settlement agent) to other NCSDs/ICSDs including Clearstream Banking Luxembourg . 6
PTS target solution: Phase I & II (1/2) NYSE BondMatch ™ Trading Trading Member Member Transactions LCH.Clearnet SA Transactions validation Positions management Corporate events Clearing Clearing Member Netting and Delivery vs payment instructions Member Risk management and margin call Fails, buy-in and default management Audit trails Reporting Net instructions Phase I Phase II Settlement Settlement Agent Agent Euroclear Bank Other NCSDs: CBF… Euroclear France Clearstream Lux Euroclear Belgique Euroclear Netherland Interbolsa 7
PTS target solution: Phase I & II (2/2) • Phase I : few months after the launch (Q3 2011 TBC) LCH.Clearnet SA will offer the STP settlement in Clearstream Banking Luxembourg on top of the other NCSDs/ICSDs already available. • The clearing member will need to have an account within relevant the NCSDs/ICSDs directly or indirectly via a settlement agent. • Phase II: then it is envisaged that NYSE BondMatch™ platform could be settled in other NCSDs. A thorough feasibility study is ongoing and the conditions of its implementation will be communicated when the volumes and members appetite will be confirmed. 8
LCH.Clearnet SA fees • LCH.Clearnet SA Clearing fees will be 0.10 € per posting. • LCH.Clearnet SA Settlement Related costs , (i.e. a variable fee per instructions depending on the chosen NCSD/ICSD, which corresponds to the passing back of the costs charged by the NCDS/ICSD to LCH.Clearnet SA) are today. 0.41 € per instruction settled in Interbolsa, 0.63 € per instruction settled in Euroclear France, Euroclear Belgium, Euroclear Netherland, Between 1.27 € and 1.50 € per instruction settled in Euroclear Bank. • LCH.Clearnet SA comprehensive and updated fee grid is available on our website http://www.lchclearnet.com/fees/sa/products/cash_markets.asp . 9
LCH.Clearnet SA contacts Should you need any further information on the clearing conditions of NYSE BondMatch™ transactions do not hesitate to contact: Mykael LEMOSLE mykael.lemosle@lchclearnet.com +33 (0) 1 70 37 65 27 10
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