One of the main drivers for settlement failure is being unable to deliver the agreed securities on time. There are many potential causes to this, but it is often the result of complex inventory management processes, or the consequences of fails in the settlement chain. 

Chapter 2 of our settlement efficiency series looks at the benefits of partial settlement. 

Partial settlement is a very effective way of reducing your settlement fails due to lack of securities.

Partial settlement is triggered if the transaction is eligible, this means that both parties agree to settle partially, and if some of the securities are available in the deliverer’s account.  Part of the quantity and amount specified in the transaction settles, with the outstanding amount remaining pending with the aim to settle in due course. 

Partial settlement with Euroclear

In Euroclear Bank, we offer: 

  • auto-partial settlement, where Euroclear system triggers the partial settlement based on your available positions 

  • client partial release, where you determine the quantity for partial settlement

All partial settlement is dependent on both parties agreeing to settle partially. As part of our settlement efficiency initiative we have set an ambitious target that by the end of 2024, we want to achieve 85% of all settlement instructions being eligible for partial settlement on their intended settlement date.

The following video explains the working group findings on partial settlement, their recommendations for best practices on partial settlement and the various service enhancements we have planned for later this year. 2024 is the year of partial settlement enhancements, giving more tools and more flexibility within our ecosystem to improve settlement efficiency together. 

Greater use of partial settlement can help reduce settlement fails, reduce costs and improve efficiency, so join us and help us collectively reach our improvement goals.

Partial settlement guide

For more information on partial settlement, we have produced a guide, available here.