Settlement process - Cyprus


Settlement cycles

Stock Exchange (SE) trades - all securities:


Over-the-counter (OTC) trades - all securities:

from T+0 until T+2

Settlement flow

Stock Exchange trades

Shares and corporate bonds listed in CSE

CSE transactions are the trades declared in the regulated market operated by the CSE. These trades are always against payment and contractual settlement (T+2) is applied.

Following the implementation of unbundling of clearing and settlement in the Cypriot market1, the settlement of stock exchange trades takes place initially at the level of the principal account of an intermediary, for example broker, and on the same day, eventually at the end client level (Client Settlement) on the basis of the instructions provided by the operators of the accounts of the end clients.

A principal account is a technical account linked to the proprietary account of the intermediary. No ownership is allowed on the principal account and the total balance should be zero at the end of each day.

Clearing and settlement periods

All times are Cyprus time (CET+1) unless otherwise stated.

T+0Following the close of the trading day, CSE sends the CSD the electronic trade file of the day. The file is downloaded to SAT where securities and values of trades (buys or sales) are added up per investor, per broker, per security and type of trade and the weighted average value of the trade.

If the clearing and settlement of the trade is taken over by a custodian bank participating as operator in SAT, the broker that executed the trade gives-up the clearing and settlement of the trade to the clearing member. Thus, the clearing member assumes all obligations and claims of the broker with regard to the settlement process. The trade give-up of a specific buy/sale is done after the finalisation of trades throughout the settlement cycle. Wrong give-ups can be corrected (ongoing process from TD to SD at 13:45).

Local broker sends to the custodian the Broker Contract Slips (BCNs) for the trades executed on the market on behalf of the clients of the custodian. Once all elements required for a transaction processing are in place (BCNs, trade shifting and client instructions), the custodian will initiate pre-matching for the on-exchange transactions. Wrong give-ups can be corrected.


The settlement process starts by registering in the SAT the instructions that result from the clearing. The matching is performed combining deliver-receive instructions at regular time intervals. Pre-settlement is activated after the beginning of the settlement cycle. After the pre-settlement process where the availability of the required cash amount and securities are checked and clearing members are informed of matched transactions that cannot be processed, the settlement begins in batches.

The deadline for meeting on-exchange obligations at CSD is 13:45. Participants need to fulfil their cash obligations before their securities are released. Cash is to be paid directly to their cash accounts at Target 2.

Deadline for custodians to upload OTC/OTC Principal transactions in CSD system is 14:00.

The last settlement cycle runs at 14:15 and around 15:00 the settlement is completed. The settlement is multilateral following the DVP principle and is considered final and irrevocable for the results it has produced to the investors securities accounts and the operators cash accounts.

When settlement closes, the automated transfer process to the intermediary's proprietary account takes place for any remaining securities on the principal account.

Once trades are cleared and settled in the CSD, the custodian will release real-time SWIFT confirmations to the respective clients. Cash clearing is completed through the pool cash accounts of participants in TARGET2.

Fees and charges - stock exchange trades

In the settlement process of stock exchange trades, the following fees apply:

  • Client settlement (T+2): EUR 0.50 per settled transaction;
  • End-of-day sweep from the principal account to the custody account: EUR 0.50 per side;
  • Shaping fee (related to remote members who appoint GCL): EUR 1.00 (waived if shaping is done until 16:00 on TD+1).

Over-the-counter (OTC) trades

OTC trades can be conducted in the CSE through a general operator approved by the CSD. OTC trades are matched and settled through the CSD system (SAT).

For market monitoring and statistical purposes, the reason for the OTC trade should be provided in the settlement instruction (for details please refer to Market  Link Guide (Cyprus)).

The following types of OTC trades are supported by the CSE:

  • Normal OTC trades;
  • Re-registration trades.
  • OTC lending and borrowing (effective 16 January 2015).

Normal OTC and OTC lending and borrowing trades can be made both free of and against payment. Re-registration OTC trades are free of payment only.

The following market fees1 (calculated by the CSE) are applied to OTC trades:

  • Equities - normal OTC trades for equities listed in the main market 3.5bps per side and for equities listed in the other markets 8.5bps (plus EUR 1.00 for against payment transactions, per side). Minimum EUR 20.00;
  • Fixed income - normal OTC trades: 1.5bps per side (plus EUR 1.00 for against payment transactions, per side) with minimum EUR 20.00;
  • Re-registration: EUR 5.00 per side.
  • OTC rectification trade: EUR 20 per side.
  • Stock Borrowing/Lending: EUR 20.00 per side.


Securities subject to registration are automatically re-registered during the settlement of the trade.

All Clearstream Banking customers’ securities are held at the CDCR in the name of Clearstream Banking S.A., which is considered as the final beneficial owner.

The CDCR acts as the central registrar in Cyprus and, therefore, registration, which is part of the settlement process, occurs simultaneously with settlement.

Stamp duty

Stamp duty is not applicable in the Cypriot market.


If a clearing member has not concluded a block trade to buy-in the stock on T+2, the Director General of the CSE may decide to take the following actions:

  • Issue a written reprimand;
  • Impose a fine of up to EUR 3,400 per day of default;
  • Prohibit the clearing member from participating in the clearing of transactions;
  • Suspend the capacity of the clearing member for a fixed term;
  • Delete the clearing member, resulting in the clearing member losing its capacity.

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.


Once a trade is executed on the exchange, it must settle. Therefore, in accordance with market practice, if one of the counterparties is short of provision, a buy-in will be enforced.

If a transaction does not settle on the account of the selling party on T+2, the clearing member is responsible for settlement of the failed transaction.

The clearing member should cover the trade via a buy-in process booked through Spot 1 and Spot 2 block trades, as follows:

  • By imposing terms or limitations with regard to the member's participation in the clearing or settlement of transactions (for example, in the case of clearing members, imposing liabilities for the mandatory closing of open positions or for undertaking the coverage of transactions alone);
  • By prohibiting a Certified Clearing Person from participating in the clearing of transactions;
  • By imposing fines of up to EUR 3,400 per day of default.
Type of block tradeBooking
Main, Shipping, Major Projects, Parallel, Alternative and Investment Companies markets (local time)Special markets
(local time)
Fixed income markets
(local time)

Spot 1

T+1 to T+2

10:30 to 14:00

11:15 to 13:20 (

special category market)

12:30 to 14:00 (special characteristics)
10:32 to 13:25

(government bonds)

10:32 to 14:00 (corporate bonds)

Spot 2


10:15 to 10:30

11:15 to 11:45

11:32 to 12:00

The member broker that conducts Spot 1 and/or Spot 2 block trades needs to immediately advise the CSE, reporting the details of the transactions and the reason for the failed transaction.

If any profit arises from the use of Spot 1 or Spot 2 block trade to close the failed trade, such profit should be allocated to the supplementary fund managed by the CSE Council (preventing delays in the settlement process when there are unsettled trades).


Short selling is permitted in accordance with the European Regulation 236/2012. As per CSE Regulation 33, para, the member that effects the short selling on market is responsible to confirm that the terms and conditions of the short sell are met.

The Capital Market Commission reserves the right to entirely prohibit or limit the use of short selling. Short selling is allowed to be conducted on specific securities as decided by the CSE and announced to the Capital Market Commission the latest 48 hours in advance. Currently short selling is permitted on securities belonging to all markets except for the ones belonging to the Special Category and the Special Characteristics market.

1. Unbundling of clearing and settlement was effective in Cyprus on SD, 6 June 2011.