Clearstream extends the ICSD settlement day and improves US market coverage

Clearstream is extending its end-of-day deadlines for securities (incl. collateral) and cash across all American markets in April 2014
Clients will also benefit from an extended settlement window for all internal transactions
The ultimate aim is to cover the entire US processing day in 2016

Clearstream, the post-trade services provider of Deutsche Börse Group, is extending the settlement day of its international central securities depository (ICSD). This results in improved cash and securities deadlines for internal settlement activity as well as for domestic settlement with local counterparties in the US, Canada and Latin American markets such as Argentina, Brazil, Mexico, Uruguay and Peru. The step will also facilitate the free flow of collateral within the extended deadlines.

In a first step, from April 2014, it will be possible to settle internal and domestic US transactions via Clearstream until 20:00 CET (14:00 EST), an extension of two hours compared to the current cut-off time of 18:00 CET (12:00 EST). The US Dollar cash deadline will also be extended to 20:00 CET (14:00 EST), allowing cash management closer to local market deadlines.

In a second step, in 2015, the deadlines will be pushed back by another 1.5 hours, extending settlement to 21:30 CET (15:30 EST). In a final step, Clearstream aims to offer settlement throughout the entire US business day in 2016. As it progresses towards its goal to achieve full coverage of the US business day, Clearstream will also offer improved cash and securities settlement deadlines on all its North and Latin American links.

Jeffrey Tessler, Chief Executive Officer of Clearstream, commented: “This extension of both internal ICSD settlement times and securities and cash deadlines offer significant new flexibility for our customers and the markets we serve. They represent a first step in a planned series of reviews into the American operating day that will ultimately, by 2016, cover the full business day EST. From a collateral management perspective, it greatly enhances our customers access to the highly liquid US market as well as the AAA-rated Canadian market through our Global Liquidity Hub.”

This extension of the ICSD business day is part of a larger effort by Clearstream to extend its settlement times. This extension of cash and securities deadlines towards the Western hemisphere and all related American markets was preceeded by another major extension of settlement times towards better interoperability to the Eastern part of the globe for all the Asian markets back in 2009.

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