LCH.Clearnet Ltd Notice - T+2 settlement cycle migration

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Company Circular No:

LCH.Clearnet Ltd: LCH.Clearnet Circular No: 3524

EquityClear Circular No

EquityClear Circular No: 13


01 October 2014


 All EquityClear Clearing Members


On the 6th October 2014, 26 markets will migrate from a T+3 to a T+2 settlement cycle for cash equities.

LCH.Clearnet Ltd (LCH.Clearnet) has conducted extensive consultation with market participants on the potential market impacts from migrating to T+2, in particular how LCH.Clearnet could support a smooth and orderly transition for clearing members as they adjust to the new shortened settlement cycle.

To that effect, LCH.Clearnet will implement a temporary change to the cash equities penalty regime specified under Article 15 of the SSR.

The fixed element of the daily fails charge will reduce from £20.00 to £2.00 for all fails outstanding from Wednesday the 8th October 2014 to Tuesday 14th October 2014, whilst the ad valorem element will remain unchanged.  The fixed element of the daily fails charge will be reinstated to £20.00, calculated against a T+2 settlement cycle, from Wednesday 15th October 2014. 

During this pre and post migration period, LCH.Clearnet will continue to apply fines relating to prior outstanding T+3 failed settlements and the Buy-In process will not change.

LCH.Clearnet will monitor the settlement discipline closely and provide clearing members with full assistance to ensure continued market efficiency.

LCH.Clearnet S.A. and LCH.Clearnet Ltd have carried out a joint approach to the penalty charge amendment consultations to simplify the process for clearing members of both entities.  To view the LCH.Clearnet S.A. member notice please click here.

Please contact the following should you require further information: or  + 44 (0) 207 426 7265