MARKET PRACTICE GUIDE FOR SECURITIES SETTLEMENT 2012 TABLE OF CONTENTS 1. Introduction ............................................................................................................... 4 1.1. The purpose of the market practice guide ........................................................................... 4 2. Market practice for securities settlement in Estonia ............................................................ 5 2.1. Clearing and settlement organization ................................................................................ 5 2.2. Applicable laws, rules and regulations ............................................................................... 5 2.3. Operating hours and public holidays ................................................................................. 5 2.4. Clearing agents .......................................................................................................... 6 2.5. Clearing and settlement of NASDAQ OMX Tallinn trades ........................................................ 6 2.5.1 Settlement cycle .................................................................................................................... 6 2.5.2. Trading and settlement currency ................................................................................................ 6 2.5.3. Generation of TSE trade information for settlement .......................................................................... 6 2.5.4. Trade enrichments ................................................................................................................. 6 2.5.5. Change of the settlement date ................................................................................................... 7 2.5.6. Change of settlement place ...................................................................................................... 7 2.5.7. Trade confirmations................................................................................................................ 7 2.5.8. Default handling .................................................................................................................... 7 2.6. OTC Transactions ...................................................................................................... 8 2.6.1. Settlement Cycle ................................................................................................................... 8 2.6.2. Currencies ........................................................................................................................... 8 2.6.3. Instructions and enrichments ..................................................................................................... 8 2.6.4. Tolerance Amount ................................................................................................................. 9 2.7. Clearing and settlement of securities transactions ................................................................. 9 2.7.1 Settlement day schedule .......................................................................................................... 9 2.7.2 Settlement eligibility control ....................................................................................................... 9 2.7.3 Collating of settlement instructions ............................................................................................. 10 2.7.4 Trade-by-trade settlement with optimization batches ....................................................................... 10 2.7.4.1 Outline of settlement processing for a single settlement instruction ........................................ 11 2.7.4.2 Optimization ................................................................................................................ 11 2.7.4.3 Trade-by-trade settlement ............................................................................................... 11 3. Market practice for securities settlement in Latvia ............................................................ 13 3.1. Clearing and settlement organization .............................................................................. 13 3.2. Applicable laws, rules and regulations ............................................................................. 13 3.3. Operating hours and public holidays ............................................................................... 13 3.4. Clearing agent ......................................................................................................... 14 3.5. Clearing and settlement of NASDAQ OMX Riga trades ........................................................ 14 3.5.1. Settlement cycle .................................................................................................................. 14 3.5.2. Trading and settlement currency .............................................................................................. 14 3.5.3. Settlement principles ............................................................................................................ 14 3.5.3.1 Settlement by net principle .................................................................................................... 15 3.5.3.2. Settlement by gross principle ................................................................................................ 17 3.5.4. Default handling .................................................................................................................. 18 3.6. Settlement of OTC DVP transactions .............................................................................. 19 3.6.1. Trade and settlement currency ................................................................................................ 19 3.6.2. Settlement period ................................................................................................................ 19 3.6.3. Instructions and confirmations ................................................................................................. 19 3.6.4. Settlement of OTC DVP transactions ......................................................................................... 19 3.6.5. Failure of settlement ............................................................................................................. 20 3.7. Settlement of transactions in foreign currencies .................................................................. 20 3.8. Free-of-payment transfers ........................................................................................... 20 4. Market Practice for Securities Settlement in Lithuania ....................................................... 22 4.1. Clearing and settlement organization .............................................................................. 22 4.2. Applicable laws, rules and regulations ............................................................................. 23 4.3. Operating hours and public holidays ............................................................................... 23 4.4. Clearing agents ........................................................................................................ 24 4.5. Clearing and settlement of NASDAQ OMX Vilnius trades ...................................................... 25 4.5.1. Settlement cycle .................................................................................................................. 25 4.5.2. Trading and settlement currency .............................................................................................. 25 4.5.3. Generation of AB NASDAQ OMX Vilnius trade information for settlement ............................................. 25 4.5.4. Cancellation of AB NASDAQ OMX Vilnius trades .......................................................................... 25 4.5.5. Trades enrichments.............................................................................................................. 26 4.5.6. Change of settlement date...................................................................................................... 26 4.5.7. Change of settlement conditions .............................................................................................. 26 4.5.8. Confirmations of settlement movements ..................................................................................... 27 4.5.9. Pre-settlement activities ......................................................................................................... 27 4.5.10. Cash settlement in BoLT ...................................................................................................... 28 4.5.11. Settlement of securities ........................................................................................................ 29 4.5.12. Cash and securities settlement in TARGET2 .............................................................................. 29 4.5.13. Default handling ................................................................................................................ 29 4.6. Settlement of OTC DVP transactions .............................................................................. 29 4.6.1. Currencies ......................................................................................................................... 29 4.6.2. Instructions ........................................................................................................................ 29 4.6.3. Real-time gross settlement ....................................................................................................