EquityClear Buy-in Changes

Report date

Circular No.

LCH Circular No 3805

Service Circular No.

EquityClear Circular No 58


10th November 2016


All LCH EquityClear Members


Dear Member,

We would like to advise you that as a result of the LCH settlement efficiency drive, from Monday 5th December 2016, we will implement changes to the current buy-in process.
Currently LCH triggers the buy-in process on ISD + 4, and attempts to execute the buy-in during the morning of ISD + 5.

From Business day 5th December all buy-ins will be executed at end of market settlement on ISD + 5.

Any member that has failed to deliver by close of business on ISD + 4 and the buy-in is due to be executed on 5th December should note, the buy-in execution will be attempted after settlement has completed on that day. This will allow failing members the whole settlement day of ISD + 5 in which to deliver and prevent the buy-in being executed. Registered Market Makers will continue to be subject to the extended buy-in regime.

It should also be noted, to ensure waiting buyers receive purchases in a reasonable timeframe, we will not consider any purchases made after the sale, by the failing seller to cover the short position, which previously would have been used to prevent the buy-in.

If LCH owes securities to a member and they then sell the position or part, we will only buy-in, the remaining outstanding position as the shares were previously due from LCH.

Members are reminded that LCH publishes EREP0025 – Settlement – Fails report, which members should use on a daily basis in preparation for any potential buy-ins.

We hope you find the above to be fair and will assist in our efforts for more timely settlement.

If you require further information please contact either:

Ian Mackenzie ian.mackenzie@lchclearnet.com; + 44 (0) 20 7426 7265 or
Tim Beckwith tim.beckwith@lchclearnet.com; + 44 (0) 207 426 7276

Yours Sincerely
Vikesh Patel, COO Equities LCH.Clearnet