Settlement process - Croatia

31.12.2014

Settlement cycles

All securities: T+2

Settlement flow

Settlement process

SDA opening hours are 08:00 - 18:00.

Settlement of SDA securities in Croatia can be made performed in either of two methods, depending on the amount and type of the transactions:

  • Contractual settlement process (netting process)

    The SDA guarantees settlement to those market participants that meet their cash and securities settlement obligations. Contractual settlement is the default settlement method for all against payment transactions of less than HRK 1 million and is performed over three batches, as follows:

    BatchCash deadline
    First:09:00 a11:00
    Second:12:3012:30 b
    Third:14:3014:30 c

    a. Securities for delivery must be available on the SDA account by 09:00.

    b. Money not paid to SDA by 11:00 can be transferred until 12:30. SDA will charge a penalty for the delay.

    c. Money not paid to SDA by 12:30 can be transferred until 14:30. SDA will charge a penalty for the delay.

  • Trade-by-trade settlement process

    Each trade is settled individually, in batches every 30 minutes, with cash deadlines between 08:30 and 16:00. Trade-by-trade settlement is the default settlement method for all free of payment transactions. No netting is performed.

Failed trades

Instructions for a failed transaction will retain their failed status until the counterparty fulfils the requirements of the transaction.

Registration

The SDA performs a book-entry transfer between the seller’s and buyer’s accounts on settlement day and there is no formal registration procedure for securities deposited within the SDA. The Croatian capital market operates in a dematerialised environment where all short-term fixed income securities and equities that have been listed on any of the Croatian exchanges are automatically eligible for deposit. Securities are deemed to be registered at the moment they are of inscribed on the purchaser’s securities account at the SDA.

Stamp duty

Stamp duty is not applicable in the Croatian market.

Penalties (buy-ins etc.)

Failing to meet cash obligations to the CDCC (SELL OUT)

If the member fails to meet  its cash obligations to the CDCC before the system checking of unsettled cash obligations on the intended settlement date (11:00 CET on SD), the member will have a debt in the CDCC and a penalty fee will be calculated.

If the member has a debt at the moment of initiating second batch of contractual settlement daily cycle on the intended settlement date (12:30 CET on SD), the CDCC will initiate sell-out procedure.

If the member meets its cash obligation on the intended settlement date before initiating the third batch of contractual settlement daily cycle (14:30 CET on SD), the CDCC will cancel the sell-out procedure on the same day.

If the member fails to meet its cash obligation by the beginning of the first batch of contractual settlement daily cycle on the day following the intended settlement date (08:30 CET on S+1), the CDCC shall suspend the member and carry out securities sell-out. The CDCC shall be entitled to charge compensation and incurred costs for securities sell-out related to covering debt on the contractual settlement cash clearing account.

Failing to meet the obligation to deliver securities to the CDCC (BUY IN)

If the member fails to deliver securities  by  the beginning of first batch of contractual settlement daily cycle  on the intended settlement date (08:30 CET on SD),  the CDCC will initiate buy-in procedure. Every day the CDCC will automatically charge penalty fee.

If the member fails to deliver securities before the initiation of the first batch of contractual settlement daily cycle on the third working day following the intended settlement date (08:30 CET on S+3), the CDCC will suspend the member and buy-in the securities.

Penalties applied in case of failed transaction and charged to members failing to meet their obligations:

Settlement

Failure

Penalty fee

Basis for calculation

Contractual Settlement

To deliver securities on SD

0,50% (VAT exempt)

Amount in cash

Fee is calculated daily, based on the value of the collateral for undelivered securities which is transferred to member's cash clearing account for buy-in. 

To deliver funds on SD

1,00% (VAT exempt)

Amount in cash

Fee is calculated daily, based on the amount of money obligation in contractual settlement, not fulfilled in accordance with the CDCC procedures.

Trade-for-trade Settlement

Delay in settlement caused by failing to meet obligations

120,00 HRK+VAT

Transaction

Fee is calculated daily for all transactions for which the settlement date has set in and the obligations have not been completely fulfilled, whether it is a case of money payments or securing necessary amount of securities. Fee is calculated at the end of the day on which transactions were supposed to be settled.