The Continuous Net Settlement (CNS) System is NSCC’s core netting, allotting and fail-control engine. Within CNS, each security is netted to one position per participant, with NSCC as its central counter-party (novation). Typically, CNS transactions that reach midnight of T+1 become guaranteed by NSCC.
CNS processes include an automated book-entry accounting system that centralizes settlement and maintains an orderly flow of security and money balances.
Throughout the CNS processing cycle, which begins on the night of T+1, the system generates reports that provide participants with a complete record of security and money positions and related information.
All NSCC full-service settling members.
CNS offers users the following efficiencies and risk protections:
On T+3, all trades due to settle are netted by issue to a net long (buy) or a net short (sell) position, and then are further netted with any new miscellaneous activities, including ACATS and ID Net transactions, and open positions from the previous day. NSCC takes the role of central counter party to these transactions.
The CNS automatic delivery process occurs in two cycles: the “night cycle,” which begins the night before settlement, and the “day cycle” on settlement day.
CNS short positions, which represent securities owed by participants to NSCC, are compared against their DTC accounts to determine availability. If shares are available, they are delivered from the member's account at DTC to NSCC's account at DTC to cover participants' short obligations to CNS. Participants can use CNS exemptions to control the automatic delivery of securities from their DTC accounts (partial settlements are permissible).
CNS long positions, which represent securities NSCC owes participants, are processed in an order determined by an algorithm. Securities are automatically allocated to users' long positions as they are received by NSCC. Participants can request priority for some or all issues on a standing or override basis. Buy-in submission notices also will affect the priority of a member's long position.
Daily money settlement is based on the value of all settled trades plus or minus mark-to-the-market calculations for all open CNS positions.
CNS System provides the following four ancillary services:
Please call Relationship Management at 888-328-2721.
Last updated December 22, 2009