Settlement process - Greece

07.02.2022

Settlement cycles

SE trades in equities and warrants:

T+2

OTC trades in equities and warrants:

T+0, T+1 or T+2

Public fixed income securities:

T+2, generally speaking1, at the Bank of Greece System2

Private fixed income securities:

Traded in HELEX and settled at ATHEXCSD on a T+1 basis

Settlement flow

Stock Exchange trades

Public fixed income securities

For trading in public fixed income securities through HELEX3, investors must:

  • Have a segregated account at ATHEX CSD; and
  • Hold the securities in ATHEX CSD prior to initiating the trading with the local broker.

The transfer of government bonds from the Bank of Greece platform to the HELEX platform to cover a sale should be executed on T-1.

Shares and corporate bonds listed in HELEX

ATHEXCSD transactions are the trades declared in the regulated market operated by the HELEX. Such trades are always against payment and contractual settlement (T+2) is applied, with the exception of public fixed income, which is settled on a T+1 basis at ATHEXCSD.

Following the implementation of unbundling of clearing and settlement in the Greek market, the settlement of stock exchange trades takes place initially at the level of the Principal Account of an intermediary (for example, a broker) and on the same day, eventually at the end client level (Client Settlement) on the basis of the instructions provided by the operators of the accounts of the end clients.

Principal account is a technical account linked to the proprietary account of the intermediary (for example, broker). No ownership is allowed on the Principal Account and the total balance should be zero at the end of each day.

Clearing and settlement period (all times are local CET+1 unless otherwise stated)

T+0Following the closing of the trading day, from 17:30 until 18:15 the HELEX informs electronically the ATHEXCSD with the trade file of the day. The file is downloaded to DSS where securities and values of trades (buys or sales) are added up per investor, per broker, per security and type of trade and the weighted average value of the trade.
If the clearing and settlement of the trade is taken over by a custodian bank participating as operator in DSS, the broker that executed the trade gives-up the clearing and settlement of the trade to the clearing member. Thus, the clearing member assumes all obligations and claims of the broker with regard to the settlement process. The trade give-up of a specific buy/sale is done after finalisation of the trade and throughout the settlement cycle. Wrong give-ups can be corrected (ongoing process from TD to SD at 17:00).
T+1

The local broker sends to the custodian the Broker Contract Slips (BCNs) for trades executed on the market on behalf of the custodian’s clients. Once all elements required for a transaction processing are in place (BCNs, trade shifting and client instructions), the custodian will initiate pre-matching for the on-exchange transactions. Wrong give-ups can be corrected.

T+2The settlement process starts by registering in the DSS the instructions that result from the clearing. The matching is performed combining deliver-receive instructions at regular time intervals. Pre-settlement is activated after the beginning of the settlement cycle. After the pre-settlement process where the availability of the required cash amount and securities are checked and clearing members are informed of matched transactions that cannot be processed, the settlement begins in batches.

Repeated settlement cycles are conducted up to 17:30 and at 17:45 the settlement is completed. The settlement is multilateral following the Delivery Versus Payment principle and is considered final and irrevocable for the results it has produced to the investors securities accounts and the operators cash accounts.

When settlement closes (17:30 - 18:00), the automated transfer process to the intermediary's proprietary account takes place for any remaining securities on the principal account. Settlement is final and irrevocable upon settlement at the CSD system.
 

Once trades are cleared and settled in the CSD, the custodian will release real-time SWIFT confirmations to the respective clients. Cash clearing is completed through the pool cash accounts of participants in TARGET2.

Fees and charges - stock exchange trades

For settlement of stock exchange trades the following fees apply:

  • Client settlement (T+2): EUR 0.50 per settled transaction;
  • Analysis/confirmation: EUR 0.50 per settled transaction;
  • OTC rectification trade: EUR 20 per side (buyer and seller).

OTC transactions - off-exchange trades

ATHEXCSD provides settlement and registration services for trades performed through HELEX. OTC trades and off-market free of payment trades that are not linked to a transaction on HELEX can settle in the Greek market via the OTC settlement mechanism in ATHEXCSD.

The OTC mechanism of ATHEXCSD supports the following free of and against payment settlement instructions:

  • Normal OTC trades;
  • OTC NCBO transfers between two omnibus accounts and between omnibus and segregated account;
  • Re-registration (defined in the market as transfer of securities of the same beneficial owner between segregated accounts and should be instructed as free of payment to the ATHEXCSD);
  • OTC lending and borrowing;
  • Collateral transfers.

Fees and charges - off exchange trades

For settlement of OTC trades the following fees apply:

  • Normal OTC trades: 6.5 basis points (bps) per trade made (3.25 bps per party, that is, buyer and seller) calculated on the value of the transactions. Minimum fee is EUR 20. In addition, a sales tax of 0.20% calculated on the settlement amount will be deducted;
  • OTC NCBO transfer: EUR 20 per party (deliverer CSD account and receiver CSD account);
  • Re-registration: EUR 20 per party (deliverer CSD account and receiver CSD account);
  • Collateral: EUR 20 per party (Collateral Giver and Collateral Receiver);
  • Borrowing and Lending: EUR 20 per party (borrower and lender).

Against payment transactions will incur an additional charge of EUR 1.00 per party.

AthexCSD calculates the charges for normal OTC transactions as follows:

  • For free of payment trades: trade price at close of business;
  • For against payment trades: trade price at close of business or the highest trade price during the day, whichever is higher.

Sales tax

Sale transactions settled in ATHEXCSD are subject to sales tax, applied at the rate of 0.20% on the transaction value.

The sales tax is collected through the local custodian on a monthly basis4.

When securities are held on an omnibus account in AthexCSD, transfers settled on such securities outside AthexCSD are reportable to AthexCSD and subject to 0.20% sales tax, unless an exemption applies. ATHEXCSD collects the tax due for remittance to the Greek tax authorities, on the basis of declarations of its participants. In such a case, the obligation to calculate and remit the sales tax lies with the intermediary acting in the settlement of the sale transaction.

Bank of Greece settlement for public fixed income

BoGS has outsourced its settlement to TARGET2-Securities (T2S). See our Settlement proces in T2S webpage for further details.

Registration

Securities eligible in BoGS are in bearer form and not subject to registration.

ATHEXCSD-eligible securities are subject to registration and automatic re-registration upon the settlement of the trade on the segregated account of the beneficiary of the settlement process.

Any account labelled as omnibus account in the AthexCSD system means an account in which transactions are settled and securities are held for a number of investors in accordance with the relevant provisions of CSDR and Law 4569/2018. The omnibus account does not evidence ownership of the securities as they belong to more than one natural or legal entity identified only in the books of the intermediary on whose behalf the omnibus account is held. Omnibus accounts are only be used for settlement purposes.

Stamp duty

Stamp duty is not applicable in the Greek market. For sales tax, see Sales tax for further details.

Buy-ins

Buy-ins - Equities:

In the event of failure on T+2 of a transaction in equities, the responsibility for settlement is with the clearing member. The clearing member is responsible for covering its obligation via a buy-in process booked through Spot 1 and Spot 2 block trades.

Spot 1 block trade

A Spot 1 block trade can be booked from T+1 to T+2 (settlement date) from 10:00 to 16:55.

Spot 2 block trade

A Spot 2 block trade can be booked on T+3 (from 10:00 to 10:30). The use of a Spot 2 block trade incurs penalty fees.

If the clearing member continues to be short of stock after 11:30 on Τ+3, the following  options apply:

  • Provided that there is no corporate action in the ATHEXCSD system from TD until 11:30 on T+3 and no trade suspension is imposed by the authorities for the related shares, the clearing member continues to be able to conclude either a STRA or a Spot 1 to cover his position;
  • If, between TD and 10:30 on T+3, the ATHEXCSD has booked a corporate action in its system or the shares have been suspended from trading by the authorities, the clearing member must settle the shortage of shares in cash (calculated as the difference between the initial value of the transaction and the official closing price of the shares on T or T+2 (whichever is greater)).

Buy-ins - Fixed income securities:

There is no formal buy-in procedure in the event of failure of an OTC transaction in fixed income securities. The cost for such a failure can be negotiated and settled directly between the trading counterparties.

Auctions in Bank of Greece

Short positions may be covered through an auction process as follows:

  • Trades in HDAT platform: mandatory auction organised by the Bank of Greece between 16:30 and 16:45.
  • Trades in BrokerTec, MTS or EuroMTS platforms or OTC trades: optional auction process available (relevant instruction sent to BOGS until 16:20). Otherwise, the trade is recycled for ten days until it is cancelled by the Bank of Greece.

Cash penalties

Penalties will be calculated and applied on matched settlement instructions that fail to settle, in full or in part, on and after their intended settlement date (ISD), if both the settlement instruction and the relevant financial instrument are subject to cash penalties.

Instruments subject to cash penalties

Any financial instrument listed in the Financial Instruments Reference Data System (FIRDS) database maintained by ESMA will be subject to cash penalties. However, cash penalties will not apply to shares listed in the Short Selling Regulation (SSR) exemption list.

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1. Depending on whether OTC or SE and, if SE, on which SE platform is used. Settlement of trades in Greek public fixed income securities conducted on SE platforms is not a service offered by CBL.
2. Public fixed income securities are also traded in HELEX and settled at ATHEXCSD on a T+1 basis. This service is not offered by CBL.
3. This service is not offered by CBL.
4. Until TD 29 April 2011, the sales tax was deducted from the settlement amount and collected by the clearing member.

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