How Same-Day Settlement (SDS) Currently Works through NSCC
NSCC SDS (Same-Day Settlement) received prior to 11:30 AM EST:
- The trades that are submitted to NSCC’s real-time processing engine, Universal Trade Capture (UTC), for same-day settlement, and received by 11:30 AM, are included in NSCC’s netting engine, Continuous Net Settlement (CNS), and settled same-day (T+0) in DTCC’s subsidiary, The Depository Trust Company (DTC).
- If a trade for same-day settlement is received prior to 11:30 AM and is eligible for CNS processing, UTC sends the trade to CNS. CNS includes the trade in that Member’s net receive or deliver obligation for that day, and CNS sends the obligation to DTC for settlement. CNS also produces an ISO 15022 message for consumption informing a Member of any CNS position change in a security due to a same-day settling trade.
- If a trade received prior to 11:30 AM is not eligible for CNS processing, the trade is sent to NSCC’s Obligation Warehouse (OW). If the delivering Member is set up for OW’s auto-deliver order feature, OW will send the trade to DTC’s Inventory Management System (IMS) for the Member to authorize.
NSCC SDS (Same-Day Settlement) received after 11:30 AM EST:
- For trades submitted after 11:30 AM to NSCC, same-day settlement is achievable and facilitated by client-directed DTC Deliver Orders (DOs) which can be processed until 3:20 PM for value, and even beyond market closing to 6:30PM free of value (i.e., money settled outside of DTC or NSCC).
- Trades received by UTC after 11:30 AM are reported on the Consolidated Trade Summary (CTS) issued at 9:00PM as ‘z’ trades (report only). These trades are not automatically sent to OW or DTC.
How Next Day Settlement Currently Works through NSCC and Omgeo
NSCC Next Day Settlement for T+1
- CNS trades are included in the net, and reported on the appropriate Consolidated Trade Summary (CTS) Report.
- Currently, non-CNS trades are not netted, and trade-for-trade instructions are issued to Members. These trade-for-trade instructions are further passed downstream to the Obligation Warehouse. If the delivering Member is set up for OW’s auto-deliver order feature, OW will send the trade to DTC’s Inventory Management System (IMS) for the Member to authorize.
Omgeo Next Day Settlement for T+1
- Omgeo submits affirmed trades to DTC’s Inventory Management System (IMS) until noon on SD-1 for automated settlement. The current DTCC cutoff for ID Net transactions is T+1 at 10:00PM. Late affirmations processed between SD-1 noon and settlement date noon by Omgeo are submitted to IMS for settlement whereby Members can elect to authorize them. All cutoffs will move to S-1 at 11:30AM in a T+2 settlement cycle.
- Unauthorized transactions remain in DTC for five days in an ‘unauthorized’ status, after which they are automatically dropped from the DTC system.