Settlement process - Austria
|Stock Exchange trades:||T+2|
|OTC trades:||Freely negotiable between the parties but the market practice is T+2|
Direct Settlement Advanced (DS.A)
Direct Settlement Advanced (DS.A) is the clearing and settlement system for OTC trades and is operated by OeKB CSD GmbH.
Over-the-counter transactions account for a large proportion of Austrian securities turnover (95% of bond turnover, approximately 60% of equities turnover). Participants in the central securities depository system instruct WSB to settle OTC transactions directly via DS.A or via a SWIFT interface.
DS.A is a gross settlement system and securities are cleared and settled on a gross basis. Funds are cleared on a net basis simultaneously during the batch cycle. Cash clearing takes place on participants’ cash accounts with OeKB CSD or OeNB.
Trades are not automatically processed into DS.A participants are required to enter the settlement instructions per trade into the system via direct access or a SWIFT interface.
OeKB CSD currently runs four batches for against payment transactions and five batches for free of payment transactions. Finality for funds and securities is reached after each batch run.
OeKB CSD matches against payment instructions before settlement. Matching is binding and a cancellation of matched instructions is only possible upon mutual consent of both parties.
The following information is considered as matching criteria:
ISIN, Nominal Amount/Units, Trade Date, Settlement Date, Counterparty, Buy/Sell Instruction
Free of payment instructions require matching.
OeKB CSD's settlement system DS.A differentiates between two instruction qualities, "Preadvice" and "Instruct".
An instruction can be sent in advance in the form of a "Preadvice" such that, if there is a counterparty instruction, the instruction of this type can already pre-match. The "Preadvice" is usually sent into the DS.A system, if the counterparty has insufficient securities, which will be reported to customers via a special reason code.
Matching and Settlement however is only possible when both counterparties have issued instructions of the quality "Instruct". In this case, the instruction status is immediately changed from pre-matched to matched and is reported to OeKB CSD customers via the Online Client or via SWIFT message MT548 (Settlement Status and Processing Advice).
Instructions can settle either in OeKB CSD's real-time settlement processing or in a batch run, depending on the setting of the OeKB CSD customer in DS.A.
The majority of Austrian securities are held in bearer form. Only a small number of securities, mainly partially paid-up shares, are in registered from, as required by law.
Transfers of registered securities are only possible when they bear a blank endorsement. These registered securities need to be held in individual safe-custody accounts at the WSB.
Stamp duty is not applicable in the Austrian market.