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Settlement cycle will shorten to T+2 in October

On 6 October this year, the settlement cycle will change from T+3 to T+2. The cycle will be shortened in most European markets to harmonise and increase efficiency. We will help and assist you with advice and testing to assure smooth transition.

The Nordic Securities Association, Euroclear Finland, Euroclear Sweden and other Nordic Central Securities Depositories, CCPs, stock exchanges and regulators have agreed on a common date to implement the T+2 settlement cycle.

The decided implementation day will be 6 October 2014. Settlement in the Nordic market will be changed from T+3 to T+2.

We will help participants and issuers to prepare and make the necessary adjustments according to the new settlement cycle.

The decision was motivated by the general harmonisation of post trade in Europe. It is regulated by the European Union Central Securities Depository Regulation, which requires that the settlement cycle is harmonised to T+2 as of 1 January 2015 at the latest. However, considering the year end freezing period, the best possible time was agreed to be early October.

The change will also effect corporate actions, if the record day follows the settlement cycle. After 6 October, the record day will follow T+2 cycle instead of T+3.

  • As of Monday, 6 October 2014 trades will be settled in two days.
  • Transactions with a trade date before or on Friday, 3 October 2014 will be settled according to a T+3 settlement cycle. Transactions with a trade date as of Monday, 6 October 2014 will be settled according to a T+2 settlement lifecycle. Settlement date for trades executed on 3 and 6 October will be 8 October, 2014.
    • T+2 settlement cycle is applicable to all trades that settle in Euroclear Finland, if they are traded:
      on a regulated market moving to T+2, such as NasdaqOMX Nordic (including First North markets).
    • on a Multilateral Trading Facility (MTF) or an Organised Trading Facility (OTF), if and when applicable.
  • T+2 will not apply to Over the Counter (OTC) or primary market transactions, i.e. issuance that typically has longer settlement period. However, for OTC the recommendation cycle is T+2, unless both parties agree otherwise.
  • If you are planning to execute corporate action events (e.g. dividend payment, capital refund, bonus issue, rights issue) close to 6 October, we advise you to contact Euroclear Finland.

Dividend payments in T+2 settlement cycle
The new T+2 settlement cycle will also affect the schedule of dividend payments. As of 6 October 2014, the record day of the dividend payments will follow T+2 cycle instead of T+3. See the picture of Account Operators' new T+2 schedule for dividend payments.

Read more on the Q&A document >

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