Clearing and Settlement Provisions

Clearing and Settlement Provisions

The Swiss Value Chain: One of Europe’s Most Efficient Securities Processing Systems

Automated End-to-End Securities Processing

Clearing is a securities risk management process supported by a clearing house or central counterparty (CCP) interposed between every buyer and seller, thus minimizing counterparty risk for participants and simplifying risk management. The CCP is the single counterparty for every participant, enabling them to net trades with multiple trading counterparties in any one security with only one settlement per day. Thanks to state-of-the-art systems and a high degree of standardization, a very high percentage of transactions on our exchange are processed automatically.

The following CCPs act as central counterparties for their members and offer clearing services for all eligible securities traded on SIX Swiss Exchange: SIX x-clear  |  LCH Ltd  |  Cboe Clear Europe

 

Understanding the Clearing and Settlement Setup

Clearing is only possible for eligible securities (CCP-eligible securities), with an automated settlement instruction being sent to the relevant central counterparty (CCP) in the form of a locked-in trade. In the case of other products, transaction are forwarded to the relevant national or international central securities depository (CSD/ICSD).
 

Locked-in Trades

The applicable rules and regulations allow SIX Swiss Exchange to forward automated settlement instructions in the form of locked-in trades to a recognized central counterparty (CCP) or an international central securities depository (ICSD).

The great advantage of locked-in trades is that clearing and settlement is fully automated and that errors from the re-entry of data can be avoided completely. No extra matching is necessary for settlement as all the necessary information is already available when a stock exchange transaction is executed.

To enable SIX Swiss Exchange to deliver this service at the international central securities depositories Euroclear Bank and Clearstream Luxembourg, participants must fill out the relevant powers of attorney (see “Forms” below). Settlement at Euroclear Bank and Clearstream Luxembourg is only possible for Non-CHF bonds.

Recognised CCPs and CSDs

Consult the list of recognised settlement organisations and central securities depositories that are incorporated in the straight-through processing process. 

Download List
CCP-Eligible Securities

In our daily reference data files, the column “CCP-eligible” indicates if a security is eligible for clearing (marked 01) or not (marked 00).

Go To the Download Section

Specifying Settlement Data

The SWXess platform automatically identifies locked-in instructions following execution of a given stock exchange transaction, including the prospective settlement date and consideration. This information is forwarded to clearing and settlement.

Settlement date

  • Stock exchange transactions in securities listed or authorized for trading on SIX Swiss Exchange are as a general rule settled on the second exchange day (T+2) following execution.

Settlement consideration amount

  • The SWXess trading platform automatically calculates the settlement consideration including accrued interest for locked-in trades.
  • When specifying the value date at the beginning of interest accumulation, public holidays in relation to the relevant Central Securities Depository, as well as the various currencies, are taken into account.

Off-order book trades

Off-order book trades may also lead to automatically generated instructions under the following conditions:

  • The participant enters the transaction as a Two-sided Trade Report.
  • If the participant has entered a Delivery Report.
  • The participant does not submit the transaction for "manual settlement".

In all other cases, settlement is performed manually. Participants are responsible for settling transactions in good time.

Static Data

In the case of static data, the Clearing and Settlement Standing Instructions (CSSI) forms are used to inform us about the central counterparties (CCP) and central securities depository (CSD) as well as about changes to settlement or clearing data. The contents of these forms (see below) relate to detailed clearing and settlement data. They will be forwarded to the relevant service partner. A period of five days should be allowed for any changes to CSSI data.

Accrued Interest Calculations & Determination of Holiday Calendars

In fixed income trading the correct calculation of accrued interest and the maintenance of the holiday calendars are important. For SIX Swiss Exchange, the calculation methods and the determination of non-business days for trading on the SWXess platform are outlined in our guide which provides several examples and applicable formulas. The document also provides the interpretation of the International Capital Market Association (ICMA) rules.

Download the Guide

Integrated Settlement Solution: Ideal for Straight-Through Processing

The integrated settlement solution of SIX Swiss Exchange is based on the cooperation of recognised central securities depositories that are incorporated in the straight-through processing setup. Our end-to-end automation of securities processing ranks among the most efficient in the whole of Europe. 

Our clearing and settlement model offers full automation via STP of all steps involved from entering an order on SIX Swiss Exchange through into the settlement infrastructure: for eligible products to the relevant central counterparty (CCP), for other products directly to the central securities depository (CSD). We also offer multi-currency compatibility as well as a choice of national and international clearing and settlement partners. 

The Swiss Value Chain

The Swiss Value Chain offers one of Europe’s most efficient forms of securities processing. Our infrastructure comprises four layers, each in relation to the specific task of Trading, Clearing, Settlement and Payment Transactions. The Swiss Value Chain integrates the subsystems horizontally as part of a coordinated process, thus creating the ideal environment for straight-through processing.

Become a General Clearing Member

Discover all the relevant information and get the application forms you need to register with the Swiss Stock Exchange as a General Clearing Member.

Start Your Application

Fully Integrated Platform

Our SWXess trading platform was developed from the outset as a fully integrated trading platform. In the form of locked-in trades, it has direct links to the settlement infrastructure, thereby removing any requirement for dual entry in multiple environments.

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