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Partial Deliveries

Partial Deliveries

Status: Best Practice Finalised, Last Updated: 28/01/2022

Auto Partial
Automatic Partial Settlement is a facility to settle incremental quantities of a failing transaction.

Auto-partial facilities should be applied by default for failing securities lending trades where its use does not disadvantage either party.

Parties may bilaterally agree to time or quantity limitations to provide sufficient opportunity to maintain collateral or other controls.

The T2S settlement system also provides Partial Hold Release functionality, and should be used as noted in SMPG Market Practices. (IBP-125)

Status: Best Practice Finalised, Last Updated: 28/01/2022

Loans with Agent Lenders
Loans with agent lenders that operate pooled lending services for beneficial owners may require an alternative approach in relation to partial deliveries.

The following use cases have been identified through working group discussion.

  • New loan - If assets are sold by an underlying beneficial owner between loan execution and settlement, the agent will either reallocate to another beneficial owner/lender or bilaterally cancel the loan with the borrower,

  • Loan close - If a borrower, after notifying a partial or full close-out, is no longer able to fulfil that delivery, the closing instruction may either be bilaterally cancelled, until sufficient asset(s) are available, or the parties may agree to manual process incremental settlements of the original instruction. The later is particularly relevant where the agent lender has provided a recall notification. (IBP-307)

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