Settlement services - Dubai (Nasdaq Dubai)
Pre-matching service is not offered on the Nasdaq Dubai market, however customers may select the Immediate release flag as shown in the tables below:
|Service offered||Method employed||Start (local time)|
|Immediate Release Flag available||Automated||On receipt of instructions|
|Connectivity medium||Instruction format|
|CreationOnline and Xact Web Portal||Tick to enable the “Immediate Release” option.|
|Xact via SWIFT and Xact File Transfer||Field :22F::STCO/CEDE/IREL|
Procedures for domestic counterparties
Domestic counterparties that want to deliver or receive securities free of or against payment to/from CBL’s account in Deutsche Securities and Services, Dubai Branch must always include the following information in their instructions:
Nasdaq Dubai Securities
|Deutsche Securities and Services, Dubai Branch BIC||DEUTAEAD|
|Clearstream National Investor Number (NIN)||DB00043804|
|Clearstream NIN Name||Clearstream Banking S.A. Nominee A/C|
|Clearstream Banking Trading Account number at the exchange||79073334|
|Five-digit account number of counterparty at CBL||For example, 12345|
|CBL safekeeping a/c number with Deutsche Securities and Services, Dubai Branch||20025334005|
For up-to-date information, please refer to CSD Member Account Details on the Nasdaq Dubai website.
Allowed countervalue difference
A maximum difference in countervalue of USD 25 or AED 100 (for AED-denominated securities) is allowed for transactions with domestic counterparties. If there is a discrepancy, the cash amount of the delivering party will prevail. Customers should note that there is no official market tolerance level in place at Nasdaq Dubai and that the levels quoted above are based on Clearstream's service offering via its custodian.
Specific settlement rules / settlement restrictions
In order to access Nasdaq Dubai securities, Clearstream's custodian, Deutsche Securities & Services, Dubai Branch maintains a main securities account with the CSD. This securities account is covered by a NIN in the system and is opened in the name of “Clearstream Banking S.A. Nominee A/C”.
The Deutsche Securities & Services, Dubai Branch securities account has the following sub-accounts - a custody account and an agent account:
- The custody account is only accessible to the custodian and the CSD itself (that is, not the broker). The account is used for the safekeeping of securities. Clearstream customers are required to advise their brokers of the NIN when placing a trade with a broker.
- The agent account. Purchased securities are received into this account before the custodian can transfer them to the custody account. Likewise, securities to be sold are transferred onto this account from the custody account in order for the transaction to take place. Clearstream customers should bear in mind that securities are not available for trading while they are held in the custody account.
Market practice is for this account to be the default account for holding securities positions.
However, post implementation of DVP in the market, securities are maintained in the agent account only as the custodian retains the right to reject any trade which is not valid or unmatched or notified by Clearstream as invalid. The Custodian responsible for the NIN is required to grant a specific broker access to the NIN; certain custodians grant this access on the condition that the broker enters into a SLA with them to govern the brokers access, liabilities and responsibilities.
Brokers will need to know the NIN under which an investor's securities are held in order to execute the transaction at Nasdaq Dubai.
Customers seeking to transfer Nasdaq Dubai securities into Clearstream are required to transfer securities via a stock exchange transaction using the Clearstream NIN provided in the Market Link Guide (Nasdaq Dubai).
In relation to AED denominated securities trade settlement, customers should be mindful that trade settlement takes place from Sunday to Thursday. Clearstream does not operate on Sundays even though the Nasdaq Dubai market is open for settlement, hence any AED trade settlement falling on a Sunday will roll over to the next available working day in Clearstream. Customers should ensure that they send timely instructions to Clearstream to avoid any further delays in settlement.
Matching - Fixed income instruments
Instructions for OTC trades that are sent by Nasdaq Dubai CSD participants are held in the Nasdaq Dubai system before being released for settlement. Instructions are matched by the Nasdaq Dubai CSD system while in this “held” status and are released on settlement date (SD) from the beginning of the business day. Matched delivery instructions are only released for settlement if securities are available in the delivering party’s account at the Nasdaq Dubai CSD. Matched receipt instructions are released automatically on the morning of SD.
Matching is binding but a transaction can still be cancelled (see below) on SD if it remains in “held” status, due to the fact that the securities are unavailable for delivery. Once released for settlement the transaction is irrevocable.
Matching - Equities, DRs and ETFs
Clearstream's custodian performs matching of settlement instructions sent by customers with reports received from Nasdaq Dubai and local brokers. Unmatched trades will be reported by the custodian to Nasdaq Dubai, the local broker and the custodian's cash settlement bank. Matching is binding.
If a sale instruction is not recieved by Clearstream before the deadlines mentioned in Settlement times - Dubai (Nasdaq Dubai), Clearstream's custodian will reject the allegement from Nasdaq Dubai via the irrevocable rejection method. The rejection will transfer the settlement obligation over to the selling broker and not allow Nasdaq Dubai to debit Clearstream’s holdings instead.
Following the rejection processed by Clearstream’s custodian, customers can send an instrution, to settle the trade in the late confirmation window, between T+2 (07:50 CET or 08:50 CEST) until T+4 (07:50 CET or 08:50 CEST). Upon receipt of the late instruction from the customer, Clearstream’s custodian will proceed to match the instruction and reverse the irrevocable rejection if the matching is successful. Settlement of the late instruction will then occur one business day later due to the time that Nasdaq Dubai requires to pay out the sales proceeds.
If a purchase instruction is not received by Clearstream by the deadlines mentioned in Settlement times - Dubai (Nasdaq Dubai), Clearstream’s custodian will reject the allegement from Nasdaq Dubai via the normal rejection method. Clearstream customers can send an instrution, to settle the trade in the late confirmation window, between T+2 (07:50 CET or 08:50 CEST) and T+4 (07:50 CET or 08:50 CEST) to send an instruction to settle the trade in the late confirmation window. Upon receipt of the late instruction from the customer, Clearstream’s custodian will proceed to match the instruction and reverse the normal rejection if the matching is successful. Settlement of the late instruction will occur on the same day as the reversal of the normal rejection method.
There is no possibility to cancel or delay settlement for trades executed on Nasdaq Dubai's trading platform. Consequently, for such trades, settlement is mandatory on T+2.
The securities market settles against USD and AED. Customers are required to provision their USD account through the standard channel of JPMorgan Chase Bank, New York. Customers are required to provision their AED account through the standard channel of Standard Chartered Bank, Dubai, UAE. Customers are strongly recommended to provision their cash account within the deadlines set for securities instructions.
No back-to-back service is currently offered on the Nasdaq Dubai market.
Management of failed instructions
Settlement of trades executed for Nasdaq Dubai securities is mandatory. Trades failing to settle on settlement date will be given an extended settlement deadline to settle by SD+2 via the late confirmation window. If a purchase trade is matched but fail to settle by SD+2, the buyer may receive cash compensation from Nasdaq Dubai for failing to receive the securities purchased. The cash compensation from Nasdaq Dubai is typically received on SD+3.
New issues settlement
Only a limited number of issues are currently eligible on the Nasdaq Dubai market. All domestic new issues will be accepted on the Nasdaq Dubai link, pending review.