Latvian Central Depository Regulation No. 15 On DVP settlement in foreign currencies

Transcription

1 Latvian Central Depository Regulation No. 15 On DVP settlement in foreign currencies APPROVED by Latvian Central Depository Supervisory Board Meeting on February 27, 2004 AMENDMENTS APPROVED On ; ; ; (Unofficial translation)

2 Latvian Central Depository (hereinafter the LCD) Regulation On DVP Settlement in Foreign Currencies (hereinafter these Regulations) shall stipulate procedure of settlement of financial instruments transactions if the relevant settlement is made in foreign currency. These Regulations are developed pursuant to Article 94, paragraph two, clause two of the Law on the Financial Instruments Market (hereinafter- the Law). 1. Terms used in these Regulations 1.1 Terms and concepts used in the present Regulation not interpreted hereinafter shall correspond to the terms and concepts used in the Law and LCD Regulation No. 1 On Participants, LCD Regulation No. 2 On Book-entry of Financial Instruments and Execution of Corporate Actions and LCD Regulation No. 3 On Financial Instruments Accounting. 1.2 Correspondent account with the LCD financial instruments accounting account, which the LCD opens for an LCD participant and in which all financial instruments held by the LCD participant are accounted. 1.3 Delivery versus payment (hereinafter - DVP) type of settlement of financial instruments transactions when financial instruments settlement and money settlement regarding these financial instruments are done simultaneously, excluding the risk of one transaction party not delivering financial instruments or not paying money. 1.4 T day day of the conclusion or registration of a transaction. 1.5 S day day on which financial instruments and related money settlement is done. 1.6 Intended settlement date the date which the buyer of financial instruments and the seller of financial instruments have agreed for settlement and that has been specified in the DVP buy/sell settlement order. 1.7 Net position a totality of liabilities and claims of one LCD participant in money or financial instruments against other LCD participants, calculated by taking into account the transactions with similar S day concluded between the parties and based on mutual transfer. 1.8 Nominee money account money account which is opened by the LCD and used for providing of money settlement regarding financial instruments transactions and corporate actions. Monetary instruments shall be held but not possessed by the LCD in this account and may be used only in compliance with the orders of LCD participants. 1.9 Stock Exchange a capital company, which, in compliance with the procedure stipulated by the Law, is licensed to organise the regulated market, or which, pursuant to the Law, has been granted the right to manage other financial instruments markets (multilateral trading facility) Transactions Concluded or Registered at the Stock Exchange a transaction Concluded or registered on the Stock Exchange trading system with financial instruments book-entered with the LCD and listed on the regulated market or other financial instruments market (multilateral trading facility) operated by the Stock Exchange Over-the-counter (OTC) transaction a transaction entered outside the trading system of the Stock Exchange with financial instruments book-entered with the LCD Transaction with financial instruments - Transactions Concluded or Registered at the Stock Exchange and Over-the-counter transaction.

3 2. General Provisions 2.1 These Regulations shall stipulate procedure whereby: LCD organizes DVP settlement of transactions Concluded or registered at the Stock Exchange if the related money settlements are made in foreign currency; LCD organizes DVP settlement of over the-counter transactions concluded or registered outside the Stock Exchange (hereinafter also the Exchange) if the related money settlements are made in foreign currency. 2.2 LCD Board shall select settlement currencies and money settlement banks for DVP settlement of financial instruments transactions organised by the LCD if the related money settlements are made in foreign currency, open nominee accounts with them and notify LCD participants on that. 2.3 LCD participants that wish to use DVP settlement of financial instruments transactions organized by the LCD if the related money settlements are made in foreign currency shall notify in writing the LCD on resolution to comply with these Regulations and declare their foreign currency account details. 2.4 LCD participant shall declare as minimum the following foreign currency account details: name of the bank; Bank Identification Code (BIC); account number; foreign currency for which the account is used. 2.5 If an LCD participant wants to change the foreign settlement bank or stop using DVP settlement organized by the LCD for financial instruments if the related money settlements are made in foreign currency, it shall notified to the LCD in writing. 2.6 For transactions concluded or registered at the Stock Exchange, the intended settlement date may not be specified prior to the date when the DVP settlement order has been submitted to LCD, simultaneously taking into account that the date may not be earlier than the financial instruments registration date within the LCD accounting system and not later than the financial instruments deletion date from the LCD accounting system. 2.7 For an OTC transaction, the intended settlement date may be specified as a date preceding the submission of the DVP settlement order to LCD (past date), as a date following the submission of the DVP settlement order to LCD (future date) or the same as the date when the DVP settlement order is submitted, simultaneously taking into account that the date may not be earlier than the financial instruments registration date within the LCD accounting system and not later than the financial instruments deletion date from the LCD accounting system. 2.8 For an OTC transaction, where the intended settlement date specified in the DVP settlement order is the date when the DVP settlement order is submitted to LCD (present date) or a date following the submission of the DVP settlement order to LCD (future date), the S day for the DVP settlement order will coincide with the intended settlement date specified in the DVP settlement order. 2.9 For an OTC transaction, where the intended settlement date specified in the DVP settlement order is preceding the submission of the DVP settlement order to LCD (past date),

4 the S date for the DVP settlement order is the date when the DVP settlement order is submitted to LCD The date of T day may not be after the intended settlement date 2.11 The exchange of information between the LCD and an LCD participant shall be carried out electronically and in compliance with the procedure stipulated in LCD Regulation No. 11 On Data Exchange To reveal the book-entries regarding financial instruments transfers the classifier of the types of LCD participants, financial instruments accounts and transfer orders shall be used in compliance with LCD regulation No. 11 On Data Exchange DVP settlement order shall be considered as entered into the settlement system of LCD and shall be irrevocable from the moment by initiating the execution of DVP settlement order by LCD Ownership rights to financial instruments and rights attached to them for transactions with financial instruments shall be passed as of the moment of registration of the financial instruments in the account of the obtainers. 3. Types of DVP Settlement The following DVP settlement types of financial instruments transactions shall be possible within the accounting system of the LCD if the related money settlements are made in foreign currency: 3.1 DVP settlement by net positions which the LCD provides for transactions concluded or registered at the Exchange if the settlement period is T+1 or longer. 3.2 DVP settlement of each transaction separately (by gross principle) which are provided by the LCD for: Over-the-counter transactions; Transactions concluded or registered at the Stock Exchange if the settlement period is T DVP settlement by Net Positions of Transactions Concluded or Registered at the Stock Exchange 4.1 LCD shall perform DVP settlement by net positions which the LCD provides for transactions registered or concluded at the Exchange if the settlement period is T+1 or longer. By default the settlement period is T+3 and precise settlement period is determined by the Exchange when submitting the DVP settlement order to the LCD. 4.2 The initiator of DVP settlement by net positions of transactions concluded or registered at the Exchange shall be only the Exchange, based on the transactions concluded or registered within its trading system. 4.3 On the T day the Exchange shall prepare and send to the LCD DVP settlement buying and selling orders after the conclusion or registration of a transaction within its trading system in compliance with the procedure as stipulated in the agreement entered into between the LCD and the Exchange.

5 4.4 On the T day the Exchange shall inform about the conclusion or registration of a transaction within its trading system also the Exchange members who have concluded or registered the transaction. Exchange members, in compliance the agreement entered into between the LCD and the Exchange on settlement of Exchange member s transactions concluded or registered at the Exchange, shall inform the relevant LCD participant on activities to be performed to provide DVP settlement. 4.5 If DVP settlement buying and/or selling order has been submitted to the LCD by the Exchange, indicating that the transaction has been concluded or registered at the Exchange by a person which is not entitled without a special confirmation to indicate that the liability to make settlement is undertaken by an LCD participant with which the buyer and/or seller have opened a financial instruments account, the LCD participant shall send the confirmation to make settlement to the LCD. 4.6 Also in the event if a transaction at the Exchange has been concluded or registered by a person who is entitled without a special confirmation to indicate that that the liability to make settlement is undertaken by an LCD participant, may, when submitting DVP settlement buying and/or selling order to the LCD, indicate that a confirmation is required from the LCD participant with which the buyers or sellers have opened a financial instruments account. 4.7 Confirmations referred to in Subparagraphs 4.5 and 4.6 shall be submitted to the LCD before 17:00 on the S-1 day; if all fields of confirmation message have been filled in correctly and the message confirms settlement of a transaction concluded or registered at the Exchange, the LCD shall send the notification to the LCD participant; if any field of confirmation message have been filled in incorrectly and the message does not confirm settlement of a transaction concluded or registered at the Exchange, the LCD shall send the notification to the LCD participant. 4.8 If before 17:00 on the S-1 day the LCD has not received the confirmation from the LCD participants or it is erroneous, the liability to make settlement of the transaction shall be devolved to the member of the Exchange who has concluded or registered the transaction at the Exchange and the LCD shall send notifications to parties involved in the transaction. 4.9 If the LCD has not commenced the execution of DVP settlement order, it may be cancelled by the Exchange by sending a DVP settlement order cancellation notification to the LCD Procedure and schedule of DVP settlement by net positions for transactions concluded or registered at the Exchange if the settlement period is T+1 or longer: LCD participant with which the seller has opened a financial instruments account shall provide the necessary number of financial instruments in the correspondent account with the LCD not later than 11:00. on the S day; LCD participant with which the seller has opened a financial instruments account shall transfer the necessary amount of money to the bank money account as indicated in compliance with Subparagraph 2.2 of these Regulations not later than 11:00 on the S day; :00 on the S day the LCD shall account net positions for financial instruments and money;

6 between 11:00 and 11:30 on the S day the LCD shall verify sufficiency of financial instruments in the financial instruments account of LCD participants according to the accounted net positions: if the number of financial instruments is sufficient, the LCD shall block the financial instruments; if the number of financial instruments is not sufficient, the LCD shall select the transactions the settlement of which can be made, taking into account the number of accessible financial instruments and the order of transaction conclusion as indicated by the Exchange. LCD shall account new net positions and block the financial instruments. Settlement of the transactions selected due to insufficient number of financial instruments shall be made for each transaction separately in compliance with the procedure stipulated in Subparagraph 5.11 of these Regulations as soon as the necessary number of financial instruments is provided LCD shall receive the confirmation from money settlement bank about the transfer of money to the LCD account not later than 11:30 on the S day; Between 11:30 and 12:00 on the S day the LCD shall control the sufficiency of money in the money account of the bank referred to in Subparagraph 2.2 of these Regulations in compliance with the accounted net positions: if the amount of money is sufficient, the LCD shall issue an order to transfer the money according to the accounted net positions; if the amount of money is not sufficient, the LCD shall select the transactions the settlement of which can be made, taking into account the amount of accessible financial instruments and the order of transaction conclusion as indicated by the Exchange.. LCD shall account new net positions and block the financial instruments, and issue an order to transfer the money according to the recent accounted net positions. Settlement of the transactions selected due to insufficient number of financial instruments shall be made for each transaction separately in compliance with the procedure stipulated in Subparagraph 5.11 of these Regulations as soon as the necessary number of financial instruments is provided Upon the receipt of the confirmation from the money settlement bank about the transfer of the amount of money involved in DVP settlement to the money account (as indicated in compliance with Subparagraph 2.3 of these regulations) of the LCD participant with which the seller has opened a financial instruments account, the LCD shall forthwith transfer the blocked financial instruments according to the accounted net positions; After the transfer of financial instruments according to the accounted net positions, the LCD shall send forthwith a notification on the execution of DVP settlement to the Exchange and all relevant LCD participants In the result of the execution of DVP settlement order, the LCD shall transfer the financial instruments declared in the DVP settlement order from the correspondent account with the LCD of the LCD participant with which the financial instruments seller has opened a financial instruments account to the correspondent account with the LCD of the LCD participant with which the financial instruments buyer has opened a financial instruments account. Simultaneously with the transfer of financial instruments, the LCD shall transfer

7 money to the money account as indicated by the LCD participant with which the financial instruments seller has opened a financial instruments account. 5. DVP Settlement of each Transaction Separately for Transactions Concluded or Registered at the Exchange 5.1 LCD shall make DVP settlement of each transaction separately concluded or registered at the Exchange if the settlement period is T The initiator of DVP settlement of transactions concluded or registered at the Exchange may be only the Exchange pursuant to a transaction concluded or registered within its trading system. 5.3 After the conclusion or registration of a transaction within its trading system, the Exchange shall forthwith, but not later than 13:30 on S-day, prepare and send to the LCD DVP settlement buying and selling order in compliance with the procedure as stipulated by the agreement entered into between the LCD and the Exchange. 5.4 The Exchange shall forthwith inform about the conclusion or registration of the transaction within its trading system also the members of the Exchange who have concluded or registered the transaction. The Exchange members, in compliance with the procedure as stipulated in the agreement entered into between the exchange member and LCD participant on settlement of member s transactions concluded or registered at the Exchange, shall inform the relevant LCD participant about the activities to be performed to provide DVP settlement. 5.5 If the DVP settlement buying and/or selling order has been submitted to the LCD by the Exchange, indicating that the transaction at the Exchange has been concluded or registered by a person who is not entitled without a special confirmation to indicate that the liability to make settlement is undertaken by an LCD participant with which the buyer and/or seller have opened a financial instruments account, the LCD participant with which the buyer and/or seller have opened a financial instruments account shall send to the LCD a confirmation about the consent to make the settlement. 5.6 Also in the event if a transaction at the Exchange has been concluded or registered by a person who is entitled without a special confirmation to indicate that that the liability to make settlement is undertaken by an LCD participant, may, when submitting DVP settlement buying and/or selling order to the LCD, indicate that a confirmation is required from the LCD participant with which the buyer and/or seller has opened a financial instruments account. 5.7 Confirmations referred to in Subparagraphs 5.5 and 5.6 of these Regulations shall be submitted to the LCD before 14:00 on the S day: if all fields of confirmation message have been filled in correctly and the message confirms settlement of a transaction concluded or registered at the Exchange, the LCD shall send the notification to the LCD participant; if any field of confirmation message has been filled in incorrectly and the message does not confirm settlement of a transaction concluded or registered at the Exchange, the LCD shall send the notification to the LCD participant. 5.8 If before 14:00 on the S day the LCD has not received the confirmation from the LCD participants or it is erroneous, the liability to make settlement of the transaction shall be devolved to the member of the Exchange who has concluded or registered the transaction at the Exchange and the LCD shall send notifications to parties involved in the transaction.

8 5.9 LCD shall commence the execution of DVP settlement order forthwith after the receipt of it from the Exchange and, if necessary, receipt of the confirmation in compliance with the procedure stipulated in Subparagraphs 5.7 and 5.8 of these Regulations If the LCD has not commenced the execution of DVP settlement order, it may be cancelled by the Exchange by sending a DVP settlement order cancellation notification to the LCD Procedure and schedule of DVP settlement of separate transactions concluded or registered at the Exchange if the settlement period is T+0: LCD participant with which the seller has opened a financial instruments account shall provide the necessary number of financial instruments for DVP settlement in the correspondent account with the LCD not later than 14:00 on the S day; LCD participant with which the buyer has opened a financial instruments account shall transfer the necessary amount of money for DVP settlement in the bank money account as indicated in compliance with Subparagraph 2.2 of these Regulations not later than 14:00 on the S day; LCD shall receive from the money settlements bank the confirmation of the money transfer to the LCD account not later than 14:30 on the S day; upon the receipt of the confirmation of the money transfer to the LCD account, the LCD shall forthwith, however not later than 15:00 on the S day, block the necessary number of financial instruments in the correspondent account with the LCD of the LCD participant with which the seller has opened a financial instruments account; having blocked the financial instruments, the LCD shall forthwith, however not later than 16:00 on the S day, issue an order to the money settlement bank to transfer the amount of money involved in DVP settlement to the money account (as indicated in compliance with Subparagraph 2.3 of these regulations) of the LCD participant with which the seller has opened a financial instruments account; upon the receipt of the confirmation from the money settlement bank about the transfer of the amount of money involved in DVP settlement to the money account (as indicated in compliance with Subparagraph 2.3 of these regulations) of the LCD participant with which the seller has opened a financial instruments account, the LCD shall forthwith transfer the blocked financial instruments to the correspondent account with the LCD of the LCD participant with which the buyer has opened a financial instruments account; after the transfer of financial instruments according to the to the correspondent account with the LCD of the LCD participant with which the buyer has opened a financial instruments account, the LCD shall forthwith send a notification on the execution of DVP settlement to the Exchange and all relevant LCD participants Partial execution of the DVP settlement orders submitted to the LCD shall not be admissible. If, when commencing the activities referred to in Subparagraph 5.11 of these Regulations, the LCD detects that there are insufficiency of financial instruments and money for the execution of DVP settlement order or all the necessary information has not been received:

9 LCD shall postpone the execution of settlement until the moment when insufficient financial instruments, money or information is provided if none of the terms set in Subparagraph 5.11 of these Regulations is due; LCD shall postpone the execution of settlement to the next settlement day if any of the terms set in Subparagraph 5.11 of these Regulations is due In the result of the execution of DVP settlement order, the LCD shall transfer the financial instruments declared in the DVP settlement order from the correspondent account with the LCD of the LCD participant with which the financial instruments seller has opened a financial instruments account to the correspondent account with the LCD of the LCD participant with which the financial instruments buyer has opened a financial instruments account. Simultaneously with the transfer of financial instruments, the LCD shall transfer money to the money account as indicated by the LCD participant with which the financial instruments seller has opened a financial instruments account. 6. DVP Settlement of each Transaction Separately for Transactions Concluded or Registered in Off-Stock Exchange Market 6.1 Settlement period of DVP settlement of each transaction separately for transactions concluded in off-stock exchange market may be between T+0 and T+360. Precise settlement period shall be indicated by LCD participants when submitting DVP settlement order to the LCD. 6.2 initiator of DVP settlement may be: financial instruments buyer, when submitting to the LCD the DVP settlement order for LCD participant: with which it has opened a financial instruments account; who has been the intermediary in the conclusion of the transaction; financial instruments seller, when submitting the DVP settlement order to LCD participant: with which it has opened a financial instruments account; who has been the intermediary in the conclusion of the transaction. 6.3 In the DVP settlement order submitted to the LCD participant by the financial instruments seller and buyer the following information shall be declared: about the seller of financial instruments: details of the seller (name, surname, Identification Number for physical persons and name; name and registration number for legal entities); LCD participant with which the financial instruments seller has opened a financial instruments account; seller s financial instruments account number; seller s foreign currency account details in compliance with the Subparagraph 2.4 of these regulations; about the buyer of financial instruments:

10 details of the buyer (name, surname, Identification Number for physical persons and name; name and registration number for legal entities) instruments account; LCD participant with which the financial instruments buyer has opened a financial instruments account; buyer s financial instruments account number; buyer s foreign currency account details in compliance with the Subparagraph 2.4 of these regulations; ISIN code of the financial instruments involved in the transaction; number of financial instruments involved in the transaction; value of settlement in money and settlement currency; date of settlement; settlement type (DVP settlement in foreign currency). 6.4 Accepting a DVP settlement order for execution, LCD participants shall: ascertain the identity of the submitter of the DVP settlement order; ascertain that the seller provides the necessary number of financial instruments for the execution of the DVP settlement order; ascertain that the buyer provides the necessary amount of money for the execution of the DVP settlement order; assign the DVP settlement order a unique number which shall be used for the identification of the order within the settlement system of the LCD; render the confirmation about accepting the DVP settlement order for execution to the submitter of the DVP settlement order. 6.5 After the acceptation of the DVP settlement order for execution the LCD participant shall forthwith, unless indicated otherwise in the DVP settlement order, prepare and send to the LCD the DVP settlement order in compliance with the procedure stipulated in LCD Regulation No. 11 On Data Exchange. 6.6 The LCD participant with whom the buyer has opened the financial instruments account has an obligation, together with submitting the DVP buy order for execution to LCD, to ensure that the cash amount necessary for the DVP settlement is transferred to the bank account according to Item 2.2 of the Regulation by the deadline specified in Item of the Regulation. 6.7 If the LCD receives the DVP settlement buying order first, it shall forthwith send a request for DVP settlement selling order to the LCD participant who is declared as the seller party of the DVP settlement. 6.8 If the LCD receives the DVP settlement selling order first, it shall forthwith send a request for DVP settlement buying order to the LCD participant who is declared as the buying party of the DVP settlement. 6.9 If an LCD participant has received from the LCD a DVP settlement selling or buying order and detects that it is erroneous, the LCD participant shall have the rights to reject it by sending relevant notification to the LCD.

11 6.10 If the DVP settlement selling and/or buying order has been submitted to the LCD by an LCD participant who has been the intermediary in the conclusion of the transactions and it is indicated that the settlement will be made by other LCD participant with which the seller and/or buyer have opened a financial instruments account, the LCD shall not commence the execution of settlement until a confirmation from the LCD participant with which the seller and/or buyer have opened a financial instruments account Also in the event if the LCD participant who has been the intermediary in the conclusion of the transactions is also the LCD participant with which the seller and/or buyer have opened a financial instruments account, when submitting the DVP settlement buying and/or selling order to the LCD it is possible to indicate that for the execution of the settlement a confirmation from the LCD participant with which the seller and/or buyer have opened a financial instruments account is required Receiving DVP settlement buying and selling orders or, if necessary, confirmations from an LCD participant with which the seller and/or buyer have opened a financial instruments account, the LCD shall bond them and control that the following details correspond: parties involved in the settlement; ISIN code of the financial instruments involved in the settlement; number of the financial instruments involved in the settlement; value of the settlement in money and settlement currency; intended settlement date; 6.13 LCD shall start executing the DVP settlement order immediately provided that it has received the information referred to in Item 6.12 of the Regulation and it is matching, and the scheduled settlement date has set in. Where the scheduled settlement date specified in the DVP settlement order is preceding the submission of the DVP settlement order to LCD, LCD shall start executing the DVP settlement order immediately provided that the information referred to in Item 6.12 of the Regulation has been received and is matching If the LCD has not commenced the execution of DVP settlement order, it may be cancelled upon the initiative of the buyer or seller by the relevant LCD participant sending a DVP settlement order cancellation notification to the LCD Procedure and schedule of DVP settlement of each separate transactions concluded or registered in the off-stock exchange market: LCD participant with which the seller has opened a financial instruments account shall provide the necessary number of financial instruments for DVP settlement in the correspondent account with the LCD not later than 14:00 on the S day; LCD participant with which the buyer has opened a financial instruments account shall transfer the necessary amount of money to the bank money account as indicated in compliance with Subparagraph 2.2 of these Regulations not later than 14:00 on the S day; LCD shall receive DVP settlement buying and selling orders and, if necessary, confirmations from the LCD participant which the seller and/or buyer have opened a financial instruments account from money settlement bank about the transfer of money to the LCD account not later than not later than 14:00 on the S day;

12 LCD shall receive the confirmation from money settlement bank about the transfer of money to the LCD account not later than 14:30 on the S day; upon the receipt of the confirmation of the money transfer to the LCD account, the LCD shall forthwith, however not later than 15:00 on the S day, block the necessary number of financial instruments in the correspondent account with the LCD of the LCD participant with which the seller has opened a financial instruments account; having blocked the financial instruments, the LCD shall forthwith, however not later than 16:00 on the S day, issue an order to the money settlement bank to transfer the amount of money involved in DVP settlement to the money account (as indicated in compliance with Subparagraph 2.3 of these regulations) of the LCD participant with which the seller has opened a financial instruments account; upon the receipt of the confirmation from the money settlements bank about the money transfer to the account (as indicated in compliance with Subparagraph 2.3 of these Regulations) of the LCD participant with which the seller has opened a financial instruments account, the LCD shall forthwith transfer the blocked financial instruments to the correspondent account with the LCD of the LCD participant with which the buyer has opened a financial instruments account; after the transfer of financial instruments to the correspondent account with the LCD of the LCD participant with which the buyer has opened a financial instruments account, the LCD shall forthwith send a notification on the execution of DVP settlement to all relevant LCD participants Partial execution of the DVP settlement orders submitted to the LCD shall not be admissible. If, when commencing the activities referred to in Subparagraph 6.15 of these Regulations, the LCD detects that there are insufficiency of financial instruments and money for the execution of DVP settlement order or all the necessary information has not been received: LCD shall postpone the execution of settlement until the moment when insufficient financial instruments, money or information is provided if none of the terms set in Subparagraph 6.15 of these Regulations is due; LCD shall postpone the execution of settlement to the next settlement day if any of the terms set in Subparagraph 6.15 of these Regulations is due In the result of the execution of DVP settlement order, the LCD shall transfer the financial instruments declared in the DVP settlement order from the correspondent account with the LCD of the LCD participant with which the financial instruments seller has opened a financial instruments account to the correspondent account with the LCD of the LCD participant with which the financial instruments buyer has opened a financial instruments account. Simultaneously with the transfer of financial instruments, the LCD shall transfer money to the money account as indicated by the LCD participant with which the financial instruments seller has opened a financial instruments account DVP settlement order shall be sent to the LCD also in the event if the financial instruments buyer and seller have opened financial instruments account with the same LCD participant. In this event the LCD participant with which if the financial instruments buyer and seller have opened financial instruments account shall be responsible for the execution of relevant money settlements.

13 7. Book-entries 7.1 In the book-entries related with the transactions of financial instruments the classificatory identified in the LCD rules No 1 On Data Exchange shall be used. 7.2 In order to provide the sufficiency of financial instruments on the moment of settlement, LCD participants shall have the rights to block the number of financial instruments necessary for the execution of the DVP settlement in the seller s financial instruments account and the amount of money necessary for the execution of the DVP settlement in the financial instruments account of the buyer. 7.3 In the period between the T day and S day LCD participants shall have the access to the information about the positions of money and financial instruments necessary for net settlement if such need may arise on the T day. 7.4 On the S day an LCD participant, receiving notification about the execution of DVP settlement order, shall make book-entries within participant s financial instruments and relevant money accounting system with the same date as the date of the execution of the DVP settlement order in the LCD. Receiving notifications from the LCD about deferred settlement, LCD participants shall not make book-entries. 7.5 DVP settlement shall be final as of the moment of the transfer of financial instruments into the correspondent account with the LCD of the LCD participant with which the receiver of financial instruments has opened a financial instruments account. 8. Closing Provisions These Regulations shall come into force as provided by The Law on Financial Instruments Market.