Introduction of penelties on missing delivery of securities
VP has in cooperation with the domestic market participants introduced a new set of rules (Penalties) on missing delivery of securities and a supporting it system has been developed
The following reasons will result in a penalty fee:
insufficient coverage of holdings
late reporting of a sale
missing final confirmation of a sale
The penalty fee will be calculated based on such reasons occurring in VP's block 40 (1015), 60(1200 ) and 50 (1335 ) and exclusively applying to securities accounts that belong to clearing participants or to socalled 'professional private investors'. The penalty fee of DKK 100 will be charged once a day per ISIN per securities account.
1. Insufficient Coverage of Holdings
If the coverage check in one of the settlement blocks mentioned above, reveals a short position, this is subject to a sanction fee. However, this will only happen if the unravelling of the short position will imply postponing trades belonging to counterparties who are direct clearing participants or 'professional private investors'.
A counterparty's late reporting of a sale (cf. below under 2), may cause the can-cellation of a penalty fee previously charged for a short position. This will happen if the counterparty's timely reporting of the sale would have prevented the short position from occurring.
2. Late Reporting of a Sale
As part of the matching process a check is made as for late reported sales that might cause a penalty fee in accordance with below rules:
The sale must be for a settlement day in the past or state a specific set-tlement block in the past
The sale must match a purchase that is or has been finally confirmed
Both counterparties to the trade are either clearing participants or `pro-fessional private investors`
Cancellation of a penalty fee previously charged for a short position in a specific holding will take place, provided that the buyer was charged with such fee in the period between the stated settlement day and the day of reporting of the sale and provided that the total holding comprised by the late reported sales in case of timely reporting would have been sufficient to prevent the short position from occurring.
3. Missing Final Confirmation of a Sale (Missing INSTRU)
As part of the individual settlement block a check is made of missing final con-firmation of a sale that was supposed to settle in the pertinent block. A penalty fee will only be calculated if the equivalent purchase is finally confirmed.
In short:
Ensure you have coverage for your sales transactions in block 40 (1015) at the latest on intended (agreed) settlement day
Send your instructions to block 10, block 20, block 30 (the overnight blocks) or at least so that they can be processed in block 40 (1015)on intended (agreed) settlement day
Release already matched instructions early so that the can be processed in block 40 (1015) on intended (agreed) settlement day
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