The Cyprus Stock Exchange (CSE) announced that effective Monday 6 October 2014 the settlement cycle of the transactions executed on listed securities that are traded on its markets will be shortened from T+3 (completion of settlement within three working days after the execution of a transaction) to T+2 (completion within two working days). This change is in accordance with the Central Securities Depository Regulation (CSDR), which among others aims to harmonise the securities settlement cycles in the European Union.
The CSE provided the following information regarding the change:
§ Migration to the T+2 settlement cycle, will take place on Monday 6 October 2014.
§ Trades executed until Friday 3 October 2014 will be settled following a T+3 settlement cycle, which means three days after the execution of the transaction.
§ Trades executed as of Monday 6 October 2014, will be settled following a T+2 settlement cycle, which means two days after the execution of the transaction.
Please note that the change to the settlement cycle from T+3 to T+2 will also apply in the cases of Over the Counter (OTC) trades which will be executed on the Central Registry/ Depository of the CSE.
Arrangements for the transition to T+2:
The settlement days for the transitional period are defined as follows:
Trade Day Settlement Day
Thursday, 2 October 2014 Tuesday, 7 October 2014
Friday, 3 October 2014 Wednesday, 8 October 2014
Monday, 6 October 2014 Wednesday, 8 October 2014
Tuesday, 7 October 2014 Thursday, 9 October 2014
Consequently, trades executed on Friday 3 October 2014 and on Monday 6 October 2014 will be settled on Wednesday 8 October 2014.
Particularly for the settlement of the trades with trade date Friday 3 October 2014, a different parameter value will be used within the Dematerialised Securities System for the Securities Settlement System. Specifically:
Securities Settlement System Provisional parameter for the
Securities Settlement System
Impact for Corporate Actions:
For the corporate actions that will be executed with record date from Wednesday 8 October 2014 and onwards the following will apply:
§ The ex-date for corporate actions e.g. cash distribution etc., will move from 2 business days before the record date, to 1 business day before the record date.
Ex Date = Record Date -1 (previously Ex Date = Record Date -2)
§ The last day of trading which applies to conversions of shares from one category to another, e.g. the reverse split etc., will be set to 2 business days preceding the record date.
Last Trading Date = Record Date -2 (previously Last Trading Date = Record Date -3)
§ July 2014 – Implementation of the required changes in the test environment of the Dematerialised Securities System and execution of migration tests.
§ September 2014 – Implementation of the required changes to the Regulatory Framework.
§ October 2014 – Migration in the production environment of the Dematerialised Securities System.