OTC RVP/DVP Trades may settle with Shorter Settlement Cycle thanks to UniCredit Lobbying

UniCredit Bulbank AD
Summary: 
As a result of UniCredit Bulbank's lobbying efforts, CDAD agreed to facilitate the option of T+1 settlement cycle for OTC RVP/DVP trades
Wed, 06/01/2016

The new Bulgarian Central Depository (CDAD) Rules, which will govern its activities in line with the functionalities of the new CDAD IT system, provide for the option that OTC trades may settle with a settlement cycle agreed between the counterparties, which cannot be shorter than T+0 and longer than T+2. This option will become effective as of the date of the final implementation of the new CDAD IT system, 1 February 2016.

At present OTC RVP/DVP trades can only settle on T+2, counted from the day of matching of the instructions at CDAD and regardless of the instrudted settlement date.

To cater for its clients' needs, UniCredit Bulbank started discussions with CDAD to allow the option of shorter settlement cycle for OTC RVP/DVP trades before the official implementation of the new CDAD IT system. As a result of UniCredit Bulbank's lobbying efforts, CDAD agreed to facilitate that option as an interim solution, subject to the following conditions:

  • the counterparties have to agree and instruct CDAD with matching settlement dates in their instruction
  • the settlement cycle cannot be shorter than T+1, where T is considered the date of matching of the instructions at CDAD
  • UniCredit Bulbank has to inform CDAD via e-mail of the trades that need to settle with a shorter settlement cycle

CDAD also confirmed that it will make the necessary changes to its new Operational Instructions to ensure that the above functionality will be available as standard service with the new IT system.

 

Impact on investors: As a result of its lobbying efforts, UniCredit Bulbank is able to offer more flexibility for settling OTC RVP/DVP trades to its clients