Amsterdam Introduces Trade For Trade Settlement Facility

From March 25 the Amsterdam Exchanges NV will introduce a new settlement system: Trade for Trade. Taken together with the existing facilities this will add up to a comprehensive and highly competitive clearing and settlement package.

The new facility comprises an item by item settlement of wholesale transactions in Dutch securities within the (inter)national trade whereby delivery and payment are inextricably linked. As such the new facility rules out principal risk. Principal risk arises in cases where no payment has been made at the time of delivery. Delivery takes place with Necigef (the Netherlands Central Institute for Giral Securities Traffic) and the (cash) payment in guilders with the Dutch central bank De Nederlandsche Bank. The new facility enables Bourse Members to transmit their settlement instructions to Necigef via the network of the securities centre of the Amsterdam Exchanges NV. Members not affiliated to Necigef can do this through their depositary bank.