Settlement services - Irish government debt securities - Euroclear Bank
The Central Bank of Ireland (CBI) has appointed Euroclear Bank (EB) as the Central Securities Depository for Irish government bonds. As such, settlement of Irish government bonds takes place in Euroclear Bank. CBL clients are able to settle all Irish government bond transactions via the CBL-EB electronic Bridge.
For details of settlement via the CBL-EB electronic Bridge, please refer to the section on the processing of Bridge transactions in the Clearstream Banking Customer Handbook.
Specific settlement rules / settlement restrictions
Transactions in Irish government bonds settle on trade date plus two business days (TD+2).
Registration
The CBI is the registrar for Irish government bonds. The CBI register consists of the holdings of:
- Euroclear Nominees Limited (grouping all securities positions held in EB accounts into a single account on the register);
- Non-Euroclear Nominees (mainly retail investors).
New issues settlement
Transactions in new issues are settled on the day on which the distribution takes place in the Irish market.
Settlement Discipline Regime and related domestic market settlement functionalities
Recycling of pending transactions
Unmatched instructions will be cancelled automatically either after 20 working days starting from the intended settlement date or the date of the last status change of the instruction.
Matched, but not settled instructions will be cancelled after 60 business days (starting from the date of receipt or on the day the last modification was sent for this instruction).
Bilateral cancellation
This means that matched instructions can only be cancelled if both domestic counterparties request a cancellation of their instructions.
Until the cancellation confirmation is received from the market, the instruction will remain eligible for settlement, that is, the instruction may be provisioned and proposed for settlement and may be subject to cash penalties.
Hold and release
The hold and release mechanism enables customers to temporarily hold back a securities transaction from domestic settlement, even if cash or securities provision is available and to release it to the domestic market only when settlement is desired. The matching process applies independently of the “hold and release” status of the instruction.
Partial settlement
Partial settlement is available for domestic transactions and the customer’s decision to accept for the transaction to settle/not to settle partially will be systematically included in the instruction sent to the local market. Partial settlement will continue as it does today and Clearstream Banking will continue to report partial settlement feedbacks received from the markets.
Cash tolerances
For domestic instructions against payment in EUR, the following cash tolerance levels will apply (as at present):
- EUR 2 for transactions of an amount up to or equal to EUR 100,000; and
- EUR 25 for transactions of an amount greater than EUR 100,000.
With non-EUR currencies, for settlement amounts equivalent to less than or equal to EUR 100,000, the tolerance level will be equivalent to EUR 2, while for settlement amounts that are equivalent to more than EUR 100,000, the tolerance level will be equivalent to EUR 25. For settlement instructions in currencies other than EUR, CSDs should use the official exchange rates of the European Central Bank (ECB), valid on 1 January of the respective calendar year.
For domestic against payment instructions, the maximum discrepancy tolerated in settlement matching varies in accordance with market practice and the conditions of the domestic link.
Matching information
The trade date is a mandatory matching criterion and domestic instructions will follow local market rules.
Cash penalties
Penalties will be calculated and applied on matched settlement instructions that fail to settle, in full or in part, on and after their intended settlement date (ISD), if both the settlement instruction and the relevant financial instrument are subject to cash penalties.
Instruments subject to cash penalties
Any financial instrument listed in the Financial Instruments Reference Data System (FIRDS) database maintained by ESMA will be subject to cash penalties. However, cash penalties will not apply to shares listed in the Short Selling Regulation (SSR) exemption list.