NASDAQ OMX is going to implement two-day standard settlement (T+2) to securities admitted to trading on the NASDAQ OMX Copenhagen, Helsinki, Iceland, Stockholm, Tallinn, Riga and Vilnius exchanges and the respective First North markets. The T+2 settlement cycle will take effect as of October 6, 2014. Currently, the settlement for trades in securities occurs on the third day after a trade is executed, and is referred to as T+3.
“Shortening the time period between trade executions and settling payments by one day will allow efficiency benefits for market participants through the reduced systemic risk enabled by limiting exposure,” said Lauri Rosendahl, Head of European Cash Equities and Equity Derivatives at NASDAQ OMX.
The introduction of a shortened settlement cycle is in line with the new settlement requirements in Central Securities Depository Regulation (CSDR), which aims to harmonize securities settlement cycles within EU. The CSDR settlement requirements determine that trades executed on regulated markets or MTFs in transferable securities shall be settled no later than on the second business day after the trade takes place.
The transition to a T+2 settlement period in NASDAQ OMX’s Nordic and Baltics markets has been prepared in each respective country in close cooperation with different market participants, Central Counterparty Clearinghouses (CCPs), Central Securities Depositories (CSDs), and relevant exchanges.