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Penalty fees in the Swedish market

Sweden has historically been one of the most efficient markets in the world when it comes to settlement. For the fixed income market this remains true, but for the equity market the settlement rate has dropped from around 99% in 2009 to below 94% during 2014.

This development has for some time been viewed with concern by Euroclear Sweden, market participants and the Swedish regulatory authorities. The measures taken so far to improve the settlement rate have not resulted in a significant improvement and the Swedish regulatory authorities have requested further actions going forward.

Introduction of a settlement penalty fee

We will therefore during the spring proceed with the introduction of a range of measures to raise the settlement rate. One of the planned measures is the introduction of a settlement penalty fee of 500 SEK on matched instructions failing to settle on the settlement date.

As the settlement rate for bilaterally settled transactions on the equity market remains relatively high the settlement penalty fee will only be charged on CCP cleared transactions.

Formal Board Approval in March

We have for some time consulted market participants and regulatory authorities on which measures can be taken to improve the settlement rates and we will continue to do so going forward. The date for the introduction of the settlement penalty fee and other measures has not yet been confirmed, and is subject to Euroclear Sweden Board approval on the 11 March 2015.

Further information regarding implementation dates, and process handling, will be provided after the Board approval meeting.

(Impact on clients: for information)

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