Yesterday SSimple announced the launch of its DLT platform as a new way to store and share standing settlement instructions (SSIs) used to settle securities transactions. The EU’s Central Securities Depositories Regulation (CSDR) for settlement came into force in February 2022, with up to €300 million in fines already imposed.
That’s not surprising because settlement failures create significant risk and are far less rare than one might expect. European regulator ESMA showed settlement fails were more than 12% for equities in April 2020.
However, despite the penalties imposed by new regulations, settlement failures persist. Clearstream reported that its settlement failure rate for 2022 was 10.57% based on volume but a whopping 58.76% based on value. Most of those figures relate to a failure to deliver securities, often because the securities are used as collateral and can’t be delivered on time.
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