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Settlement procedure


Share transactions at YSX is settled in three business days and this settlement cycle is called as “T+3 settlement (trade date plus three business days)”. Settlement arising from the share transactions is conducted between YSX and securities companies (“SCs”) through the process in transfer institutions.

T+3 settlement

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Clearing process

Central Counter Party

  • YSX works as a clearing institution, a Central Counter Party (“CCP”), according to section 51 of the Securities Exchange Law.

  • YSX calculatestrading position of each SCand replace claims and obligations between SCs into ones between each SC and YSX in a scheme of novation.

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Netting

  • YSX offsets claims and obligations between YSX and SCs in a netting processon a multilateral basisand reduces settlement risks associated with stock trading.

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Transfer instruction

  • After netting process with fixing the amounts of securities and funds to be deliveredfrom/to SCs, YSX gives transfer instruction to the transfer institutions for settlement procedure on T+2 day after stock trading.

Settlement process

Transfer institutions

  • YSX is the transfer institution for securities settlement and a fund settlement bank, KBZ Bank Ltd., is atransferinstitution for fund settlement.

  • Securities and fund settlement are conducted account transfer, book-entry transfer, between YSX and each securities company in the transfer institutions.

DVP settlement

  • To prevent a loss of principal, DVP (Delivery Versus Payment) settlement is introduced in the settlement scheme.

  • Shares are delivered on the condition that the corresponding cash payment is completed in case of a net buyer securities company while cash payment are received on the condition that the corresponding shares are delivered in case of a net seller securities company.

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Securities settlement

  • Share certificates of listed companies become invalid when a company gets list on YSX and shareholders information is registered as electronic data in YSX and SCs ICT system (“script less” or dematerialization scheme”).

  • Share transfer arising from stock trading at YSX is conducted through a process of increasing or decreasing of the numberof shares registered in YSX and SCs ICT system on T+3 day.

Fund settlement

  • Cash payment arising from stock trading at YSX is conducted between settlement bank account between YSX and SCs with a fund settlement bank on T+3 day.

 

Contact:
Market Department
Tel: 01-371167
Email: marketdept@ysx-mm.com