CDCP, the CSD in Czech Republic, published the changes of the limits used for partial settlement. The limits will be valid from 31 January 2022. The European Central Bank (ECB) exchange rates as of 31 December 2021 are used for the conversion and the values will be valid until the new values will be published in January 2023.
Where:
V= Delivery against payment (DVP, RVP) – The order will ensure the transfer of securities and cash settlement
F= Free orders (DFP, RFP) - The order will ensure the transfer of securities without cash settlement
W= Delivery with payment (DWP, RWP) – The order will ensure simultaneous transfer of securities and money to the participant on the purchase side (trade direction 1) from the sales side (trade direction 2).
Furthermore, the CDCP published the new values of the matching tolerances. These new values are effective from 5 January 2022. The ECB exchange rates as of 31 December 2021 are used for the conversion and the values will be valid until the new values will be published in January 2023
The process in the market is fully managed by the CSD system and will be as follow:
a. if a client sends RVP instruction that is UNDER the limit but the total settled amount is over by more than CZK 49.72, the CSD will NOT match and settle such RVP and the respective MT548 is released
b. if a client sends RVP instruction that is ABOVE the limit but the total settled-. amount is over by more than CZK 621.45, the CSD will NOT match and settle such RVP and the respective MT548 is released
Impact on Clients: Clients are advised to take note of the above changes announced by the CSD