Cyprus: Cyprus Stock Exchange to migrate to T+2 settlement
Reference
Our local custodian, Citibank Athens, has informed us that the Cyprus Stock Exchange (CSE) has proposed a transition to the T+2 settlement cycle effective from trade date 6 October 2014 and has communicated a high level migration plan.
Official announcement of the migration date is set to be made on 16 June 2014 and a detailed migration plan is to be provided by September 2014.
Scope of the migration
The impacted securities include shares, government bonds, corporate bonds and warrants settled via the Cyprus CSD.
The migration to T+2 settlement cycle will impact both on-exchange trades as well as OTC trades for which the settlement date should be on/before T+2 (as opposed to T+3 today).
Also, for corporate actions, ex-date will be amended in line with the T+2 settlement cycle such that ex-date will be one business day before record date.
Cutover proposal
The CSE has proposed the following transition timeline with reference to trades that are subject to the transition:
- Trade date 3 October 2014 will be the last trading date to settle with T+3 settlement cycle.
- Trade date 6 October 2014 will be first trading date to settle with T+2 settlement cycle.
- Trades on trade dates 3 and 6 October 2014 will settle on settlement date 8 October 2014.
- There will be no netting across the two trade dates.
- The CSE will provide two different settlement subsystems to segregate on-exchange settlement activity per respective trade date.
- In the morning of settlement date 8 October 2014, priority will be given to the settlement of trades with trade date 3 October 2014 over trades with trade date 6 October 2014. After midday on 8 October 2014 (exact time to be defined and communicated by the CSE), trades with trade dates 3 and 6 October 2014 will settle in parallel.
Note: These details are expected to be confirmed in The CSE’s official announcement set for 16 June 2014. We cannot guarantee that the details as presented here will not change.
We are monitoring the developments and will provide more information when it becomes available.
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