The settlement period for bond transactions done in Regular Market is two trading days after the transaction date (T+2). Whereas for Negotiation Market transactions, settlement period is between (T+1) to (T+7). In the cash book-entry process, the settlement for transactions belonging to Bonds Clearing Member (AK-EBU) and its clients is done from the Depository Account to KPEI Settlement Account and vice versa. Meanwhile, for the bonds book-entry process, the AK-EBU transaction settlement is carried out from the Depository Account to KPEI Settlement Account, while the transaction settlement belonging to its clients is carried out from Depository Sub Account to KPEI Settlement Account, and vice versa. If the settlement is carried out by the Settlement Agent, the source account or the destination account is from the Settlement Agent Depository Account.
When the chosen clearing method is netting, the fulfillment of cash and/or bonds obligation to KPEI must be submitted by 12.00 at the latest, and the cash and/or bonds obligation right will be delivered no later than 15:00. Meanwhile, for per-transaction clearing methods, the fulfillment of rights and obligations is made at 15:00.
If AK-EBU cannot fulfill its transaction settlement obligation to KPEI (either by netting or per-transaction), the AK-EBU is considered in default. Defaulting AK-EBU is given extra time to fulfil its obligations by renegotiation with AK-EBU counterpart no later than 17:00 on the settlement date. If this is not done or the negotiations are not successful, then KPEI applies Final Settlement Value (NPF) mechanism.
NPF is a failure compensation value, calculated as follows:
The flow of bond transaction settlement is presented below:
For KPEI Rules Number V-1 governing Clearing and Transaction Settlement Guarantee of Debt Securities, click here.