Deutsche Borse tightens regulations on deliveries of interest-rate futures.FRANKFURT--(BUSINESS WIRE)--May 15, 1995--The Deutsche Borse AG today announced that it has strengthened regulations for delayed deliveries in Deutsche Terminborse (DTB See Deutsche Terminbörse. ) interest-rate futures, effective immediately. The DTB interest-rate futures, the 5-year BOBL BOBL Bundesobligationen (German government bonds) contract and the 10-year BUND contract, are offered and sold in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The Deutsche Borse will impose stiff penalties "as a deterrent to delayed deliveries of the kind which occurred on a relatively large scale at the DTB in March 1995," said Dr. Reto Francioni, member of the Executive Board of Deutsche Borse AG, which is responsible for the DTB clearing. In March, some market participants had difficulties making delivery in settlement of the DTB BOBL futures contract Futures Contract An exchange traded agreement to buy or sell a particular type and grade of commodity for delivery at an agreed upon place and time in the future. Futures contracts are transferable between parties. on the March 12 due date. Under the new regulation, participants now must confirm, in writing, to the clearing house one trading day In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. prior to the delivery due date their debt securities holdings which they have given delivery notification. The regulation also states that if the holder of a short position cannot make delivery on the day of delivery or final payment is due, the clearing house will have the right to conclude a securities lending Securities Lending When a brokerage lends securities owned by its clients to short sellers. Notes: This allows brokers to create additional revenue (commissions) on the short sale transaction. transaction in the size required to meet the delivery obligation. The costs then will be debited to the account of the defaulting clearing member. Alternatively, the clearing house may also specify that a bond other than that indicated in the notification to be delivered in fulfillment of the obligation. On the fifth trading day after the delivery date, the clearing house may execute a buy-in transaction at a German securities exchange. An additional contractual penalty also will be imposed for delayed deliveries, specifically DM 1,000 per contract and a calendar day until the final delivery is made. As in the past, default interest will be charged (Lombard plus 1 percent, but no less than DM 250), to which the non-defaulting participant is entitled, as well as a processing fee of currently DM 150. The Deutsche Borse AG is among the world's most diverse, liquid and cost-efficient financial markets offering the trading of securities through its Frankfurt Stock Exchange Frankfurt Stock Exchange The largest of Germany's eight securities exchanges, operated by Deutsche Borse AS. division and trading in futures and operations throughout its Deutsche Terminborse (DTB) division. Deutsche Terminborse is also a leading provider of electronic trading and clearing systems to stock futures and exchanges worldwide. CONTACT: Deutsche Borse AG, Frankfurt Stefan Lutz, 069-2101-1500 or Trimedia, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Marc Weinstein, 212/888-6115 |
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