The initiatives seek to enhance capital markets infrastructure with the aim to protect clients’ securities transactions.
Wednesday 24, July 2019 BY KUDAKWASHE MUZORIWA
Bahrain Clear has issued a consultation paper on the proposed Delivery Versus Payment (DVP) model framework.
The enhanced DVP Model will activate the custody model in the market by combining pre-settlement controls through a custodian trade confirmation/rejection practise, with an automated solution to custodian-broker settlement.
Shaikh Khalifa bin Ibrahim Al Khalifa, the CEO and Managing Director of Bahrain Clear, said, “The proposed model is a key milestone in the equity market development as it mitigates one of the main risks outlined by regional and international investors and will align Bahrain Clear with its regional peers.”
Additionally, the proposed framework will permit local custodians to reject buy and/or sell trades for settlement where it has not received settlement confirmation from its client or there is a mismatch in the settlement confirmation.
Bahrain Clear stated that the settlement of securities on T+2 and the pre-validation of sell orders will be maintained, while the existing securities and cash settlement timings will be changed to accommodate the handling of rejected trades.