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Settlement system
Euroclear Finland handles the clearing and settlement of NASDAQ OMX Helsinki trades in shares, warrants, convertible bonds and bonds with warrants that are issued in the electronic form.The clearing parties are Helsinki Exchange’s brokers as well as the local custodians. The regulation confirmed by the Ministry of Finance is observed in carrying out the daily operations. The Financial Supervision Authority and Bank of Finland control the operations.
Trading in book-entries
Information on trades is transferred automatically from the NASDAQ OMX’s trading system to the Euroclear Finland’s clearing and settlement system, to which all clearing parties are connected. In addition to stock exchange trades, the parties can also settle off-exchange trades, deliveries of equity derivatives as well as share deliveries between stock exchange brokers and custodians who serve foreign clients.
DVP - delivery versus payment
The modified integrated clearing and settlement function in Euroclear Finland is the strictly monitored process which finalises the delivery and payment obligations deriving from the trades between the clearing parties, and the process oversees that these obligations are met. During the settlement process the book-entries are transferred trade by trade and delivery versus payment from the sellers’ book-entry accounts to the buyers' book-entry accounts.
HEXClear - clearing and settlement system
HEXClear is a real-time settlement system that enables the settlement of trades on the actual trading date (T+0). The standardized settlement period for exchange trades is three days (T+3). Money transactions related C&S are always in euros and processed via Euroclear Finland's account with the TARGET2. In other words settlement takes place in central bank money.
The HEXClear system meets all the general international requirements, standards and recommendations, and it also supports the possibility for the CCP (central counterparty) operating model in later phases if required.
In HEXClear, other than cross border link transactions are settled between 10 am - 5.30 pm. Settlement begins with an optimization process at 10 am in which most of the trades are expected to be settled. The optimization process tries to settle as many trades as possible at the same time and typically 95 - 97% of all trades are settled already in the first optimization process.
After the first optimization the daily settlement continues taking advantage of RTGS (Real-Time Gross Settlement) and recurrent optimization processes. Settlement of cross border link transactions via foreign CSDs is integrated into HEXClear. Link transactions are settled FOP (Free of Payment) in RTGS processes between 9 am - 5 pm.
Clearing parties are able to use HEXClear user interface or MQ message interface. With MQ message interface clearing parties are able to integrate HEXClear into their own systems. Information entered into HEXClear from both interfaces is processed real-time. It is also possible to receive real-time information on the progress of transaction settlements from interfaces. HEXClear provides preliminary information on the status of all settlement transactions on the day before the settlement day as well as in the morning of the settlement day.
