DKV launches system for real-time settlements of securities transactions.FRANKFURT--(BUSINESS WIRE)--April 4, 1995--Deutsche Borse AG today announced it will launch a system on Thursday, April 6, providing real-time settlement of securities transactions made on Germany's central stock market, following a trend in the U.S. and other countries toward shortened settlement. Customers of the German stock exchange's settlement organization (DKV DKV - Deutsche Krankenversicherung AG DKV - Deutscher Karate Verband (German) DKV - Yamaha Disklavier (MIDI controllable player piano)) will be able to make full settlement -- delivery and payment -- of their securities transactions in real-time, reducing the settlement risks of DKV customers to a minimum. Real-time delivery of securities without payment has been possible since January 1994. DKV's move to real-time settlement comes at a time when the securities industry in the U.S. and other countries have or are planning to correct inefficiencies in the trade settlement process. In the U.S., all broker-dealer transactions of U.S. corporate equity and debt securities will move to three-day settlement (T+3) from the current five days on June 7, 1995. According to Juergen Blitz, DKV's Chief Executive Officer, "At a time when almost everyone is talking about the benefits of compressed settlement cycles, we have taken the necessary steps to virtually eliminate the settlement risks Settlement Risk The risk that one party will fail to deliver the terms of a contract with another party at the time of settlement. Settlement risk can be the risk associated with default at settlement and any timing differences in settlement between the two parties. This type of risk can lead to principal risk.Notes: In other words, settlement risk is the possibility that your counter party will never pay you. in securities transactions." Proceeds from such real-time transactions will be settled through the "electronic counter" system (ELS) of the LZB LZB - Bulgaria Air (ICAO code) LZB - La-Z-Boy, Inc. (stock symbol) LZB - Landeszentralbank (German: German Bundesbank regional branch) LZB - Linienzugbeinflussung (cab signalling system of German, Austrian and Spanish high speed trains) Hessen, the regional Bundesbank Bundesbank Refers to the central bank of Germany. This is the U.S. equivalent of the Federal Reserve.Notes: The Bundesbank was in charge of the German deutsche mark but now that the country has adopted the euro, it is part of the European system of central banking. See also: Central Bank, Federal Reserve Bank, Monetary Policy office in the State of Hesse, in Frankfurt, from 8:15 a.m. to 1:30 p.m. The advantage of this type of settlement against payment is that the securities and payment in deutschmarks are transferred immediately and with binding effect from the account of the DKV or LZB account-holder to the account of another party. DKV account-holders will have the option to choose between settlements in real-time and any period of up to 40 days. Two-day settlements are still standard for transactions completed on the exchanges. The Deutsche Borse AG is among the world's more diverse, liquid and cost-efficient financial markets offering the trading of securities through its Frankfurt Stock Exchange division and trading in futures and options through its Deutsche Terminborse (DTB DTB - Data Transfer Bus DTB - Dayton T. Brown, Inc. DTB - De.talk.bizarre (German newsgroup aka detebe) DTB - Defense Technology Board DTB - Deutsche Börse DTB - Deutsche Terminbörse (German) DTB - Deutscher Tennisbund (German Tennis Association) DTB - Deutscher Turnerbund (German Gymnasts Federation) DTB - Digital Talking Books (National Information Standards Organization) DTB - Digitization of the Battlefield DTB - Direct Television Broadcast) division. Deutsche Terminborse AG is also a leading provider of electronic trading and clearing systems to stock futures and options exchanges worldwide. CONTACT: Deutsche Borse AG, Frankfurt Stefan Lutz, (069) 21014943 or Trimedia Inc., New York Marc Weinstein, 212/888-6115 |
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