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Euroclear UK & Ireland, the UK securities depository which operates the CREST settlement system, is extending its settlement day for direct participant banks with effect from summer of 2016.
The decision to extend the settlement day to 18:00 follows a review by the Bank of England in its role as settlement agent for the major pound sterling payment and settlement systems, CHAPS and CREST respectively. The objective is to better align the CHAPS and CREST settlement day with the typical business hours of many participants of these systems.
As part of this alignment, banks are expected to set later transaction deadlines for their customers, giving users greater flexibility to initiate transactions that can settle later in the day. Transactions that will benefit from this increased flexibility may include high value payments made by financial institutions, corporates and households, and balance sheet investment and funding decisions undertaken by financial institutions and corporates.
John Trundle, Chief Executive Officer of Euroclear UK & Ireland, commented: “There is a growing global trend for financial services to be available for longer business hours. We are pleased to help the payments industry offer longer hours, in particular by facilitating the collateral movements which support their payments activity. We therefore plan to align our operating hours with those now proposed for the CHAPS payment system.”
Euroclear UK & Ireland is the central securities depository (CSD) of the United Kingdom, Jersey, Guernsey and the Isle of Man for all domestic securities, and of Ireland for equities. It provides advanced, low-cost settlement facilities for a wide range of investment funds, corporate and government securities, and equities including those traded on the London Stock Exchange and Irish Stock Exchange.
