At present, the TCH have applied
Delivery versus Payment (DvP) through netting model for clearing and settlement of securities
traded on SET, mai, and BEX.
Delivery versus Payment (DvP)
Delivery versus Payment (DvP) is an international standard recommended by the Group of 30 (G30) which is an international body composed of representatives from leading financial institutions aiming at reforming and modernizing of the clearing and settlement system.
TCH has adopted Delivery versus Payment (DvP) model to the securities clearing and settlement in order to reduce the risks to the clearing house which acts as the securities clearing and settlement guarantor, build confidence in the system, increase liquidity in the Thai capital market, and support cross-border transactions as well as shortening of settlement cycle in the future
Settlement Date
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Type of Securities
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Settlement Date
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Equity
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The second day following the trading date (T+2)
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Debt
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The second day following the trading date (T+2)
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Cash Clearing
The Clearing House acts as an intermediary of cash clearing between buyers and sellers. There are 2 methods of the payment depending on the types of clearing members:
- General members will send/receive the payment to/from their settlement banks, which are Siam Commercial Bank Pcl., Bangkok Bank Pcl., Krung Thai Bank Pcl., Citibank and Standard Chartered Plc.
- Associate members will send/receive the payment through the Bank of Thailand’s BAHTNET system.
Diagram of Cash Clearing Procedures and Methods
Securities Settlement
In terms of securities settlement, the TSD, as the appointed settlement agent, will transfer securities in the clearing member’s accounts using the book entry through the TSD’s securities depository system according to the information from TCH.
Clearing members are responsible for maintaining the securities in their securities depository account at the amount sufficient for their securities delivery obligations as indicated in the TCH report by 1.30 p.m. on the Settlement Date (T+2).
For clearing members who are entitled to receive securities will receive the securities in their securities depository account after the cash clearing process is finished.
Clearing members are required to open at least two Depository accounts with TSD, one for their own Portfolio and another for their Clients to separate the assets and obligations of members and clients. In case of defaulting on securities delivery, defaulting member will not be able to use the client’s securities for covering their own account.
Clearing members may specify the settlement date since trade date to the settlement date according to its settlement cycle of each security. General members have to create the gross transaction by referring to trade deal. Clearing and settlement will be processed on 10.00-11.00 am. of specified settlement date. Gross settlement transactions shall fulfill following conditions:
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- Equity : Put-Through transaction in client account with valued not less than 50 million baht.
- Debt instrument : Put-Through transaction
Members must report the specified transaction to Member Supervision Department, the Stock Exchange of Thailand with in 3 working days after gross settlement process is done.
