Late/ Failed settlement claim process

Claims as a result of penalties and fines

Status: Best Practice Finalised, Last updated: 06-10-2020

Partial Close and Claims

Counterparties should endeavour to settle partial sales of stock wherever possible (see IBP-307), and should accept partial returns or recalls. Counterparties will only be liable for 'sale fail' costs for the portion of the sale that fails due to an outstanding loan position which has been recalled and not delivered in the required timeframe.

It should be noted that in some markets, additional charges may be incurred for late settlements. Where these charges are incurred due to a failing recall, the failing party is liable. Equally if overdrafts are incurred the impacted party may consider raising a claim for any costs from the failing party. (IBP-140)

Claims issuance and settlement

Status: Best Practice Finalised, Last updated: 06-10-2020

Issuance and tolerance

Counterparties should aim to issue claims within 30 days but within a maximum of 60 days of the settlement of the sale.

The recommended minimum claim is EUR500 or equivalent, or as bilaterally agreed (prior to activity). The receiving party must endeavour to pay the claim within the same time frames of 30 days where possible and within a maximum of 60 days.

The claim issuer should provide the following information on claims:
- Date, time and the name of the borrower contact to whom the recall was issued
- Trade and settlement date of recall
- Actual settlement date of recall
- Security ID and description
- Quantity recalled
- Cash amount of recall (based on sale price)
- Claim calculation (i.e. cash amount of recall, interest rate, days of fail/100/360 or 365 depending on market)
- Reason for claim
- Payment instructions

Claims should be sent via e-mail with, preferably in PDF format with signature.
The recipient should acknowledge receipt within 24 hours via return of e-mail. (IBP-141)