Shortened settlement cycle

UniCredit Bank d.d.
Mon, 04/01/2016

As of 2016, the FBiH securities market switched from a T+3 to a T+2 settlement cycle, thus observing the new CSD Rulebook on clearing and settlement.
The new Rulebook moved the settlement of securities and funds for all trades executed on the Sarajevo Stock Exchange to T+2 (except in the case where the buy-in procedure has been initiated or in case of a sell-out or other extraordinary circumstances).

The following schedule has been put in place:

  • CSD members are required to pay the net debt amount on T+2 by 10:00 CET.
  • CSD members must allocate transactions (to or from the omnibus or segregated accounts) within the CSD system on T+2 by 10:00 CET.
  • At the CSD level, the transfer of securities and funds is performed on a Delivery Versus Payment (DVP) basis on T+2 by 13.00 CET at the latest (except in extraordinary circumstances).

Another significant change that came with new Rulebook is the move of the buy-in procedure to settlement date (T+2). If a CSD member fails to cover the short position on T+2 by 10:00 CET, the CSD will start the buy-in procedure. Previously the buy-in was scheduled prior to settlement (S-2).

The Republic of Srpska (RS) already switched to T+2 a year earlier.

Harmonisation of domestic legislation with EU regulations allowed both CSDs in Bosnia and Herzegovina implement shorter settlement cycles. The move arose from the permanent improvement of regulations and practices in the capital markets in BiH and will influence them to become more competitive investment environments.

Enis Zejnic
Relationship Manager
GSS Bosnia and Herzegovina