Government securities OTC market
The OTC market is a market where a transaction is directly concluded between the seller and the buyer. OTC transactions include only government securities.
The OTC market includes the grey market and the secondary market of government securities:
- The grey market is the market where government securities are exchanged during the period between the price fixing and the effective delivery of securities. The settlement date of these transactions coincides with the settlement date of the auction.
- The secondary market is a market where government securities which have been already issued in the primary market are exchanged. The settlement date is agreed by both parties (T+1, T+2 or T+3).
Following every transaction on the OTC market, the seller and the buyer send respectively their selling/buying instructions to Tunisie Clearing. Instructions matching is processed through Tunisie Clearing’s system.
In case of a fail due to insufficient securities provisions, the transaction is pended and a notification is sent to both parties to inform about the rejection of the transaction at the end of the day.
Free of Payment operations (FOP)
FOP operations are operations of securities delivery with no corresponding cash payment. They could be settled on T, T+1, T+2 or T+3 (T = operation date) at the option of participants.
There are many types of FOP operations:
Securities portfolios transfers’ between participants:
In case of a portfolio transfer, the transferor participant must transmit a transfer order to the beneficiary participant for validation. When the order is validated by the beneficiary, Tunisie Clearing controls provisions and settles the order on the chosen settlement date.
In case of insufficient securities provisions, the transfer is pended and a notification is sent to both parties informing on the transfer recycling during the same day. If the fail is not straightened, the transaction is rejected at the end of the day.
Transfers and conversions of rights:
During a capital increase through bonus shares allocation, Tunisie Clearing provides participants with bonus rights according to their assets balance on the record date.
In order to acquire new shares, each participant must convert its rights into shares. To this end, the participant must transmit:
- A transfer order to Tunisie Clearing for settlement;
- Operation details (Management operations file) to the issuer for confirmation.
In response toparticipants transfer orders, Tunisie Clearing:
- Controls securities provisions,
- Debits participants accounts of the rights to be converted,
- Reports to participants.
Once the operation is controlled by the issuer or its mandated approved intermediary, rights conversion orders are communicated to Tunisie Clearing in order to allow the credit of new shares on participants’ accounts.
In case of insufficient securities provision, the transfer order is pended and the participant notified. The transfer order is recycled in the settlement system during the same settlement date. If the order is not straightened, it is rejected at the end of the day.
Securities intra transfers are the transfers of securities from an asset category/ account type to another within the accounts of the same participant:
- Operations related to securities transfers from an asset category to another are:
- The change of the client statute from managed to free and vice versa;
- Transactions on government securities between a bank and its clients;
- Government bonds allocations following auctions.
- Operations of placing and lifting of loads consist in securities transfers from an account type to another.
To process these operations, Tunisie Clearing checks securities provisions and settles operations instructions.
In case of insufficient securities provisions, the operation is pended and recycled in the settlement system during the same settlement date. If the fail is not straightened, the operation is rejected at the end of the day.
The primary market:
The primary market is the market where new securities are issued and subscribed by investors. It includes auctions, public offers and capital increases by subscription.
Following each Government Issue and upon receipt of the auction by the treasury, Tunisie Clearing publishes a notice to participants informing of:
- The indicative amount;
- ISIN codes and lines wordings;
- Dates of the results announcement and the auction settlement;
- Grey market deadlines;
- Deadlines for the reception of the orders of securities distribution per assets category.
On the result announcement date of the auction, the Treasury sends to Tunisie Clearing the auction result organized by line and by tender (banks and primary dealers).
From the result announcement date and until the communicated deadline, participants must send instructions regarding the distribution of the result per assets category.
On Settlement date at 11:15 am, Tunisie Clearing controls provisions and validates instructions for settlement. At 11:30, instructions cash clearing file is sent to the Central Bank in order to credit the Treasury cash account (at the Central Bank) of an amount equal to debits of banks and primary dealers’ cash accounts. Securities settlement occurs upon receipt of the Central Bank cash settlement confirmation.
- Public offers
A Public offer is the sale of a company’s shares to the public in order to raise funds.
Procedures and deadlines of public offers settlement are fixed by Tunisie Clearing and provided to participants.
On the result announcement date of the public offer (T), Tunisie Clearing receives from the stock exchange the result announcement per broker and displays it on the members’ area. From T to T+1, brokers must send instructions in order to:
- Allow the distribution of the allotted securities per assets category: these orders cover securities allotted to the broker for its account and on behalf of banks;
- Re-deliver securities allotted on behalf of banks.
From T to T+2, banks must check and validate re-delivery orders.
On T+3 at 11:15 am, Tunisie Clearing prepares operations for settlement, sends cash clearings obligations to Central Bank and proceeds to securities settlement upon receipt of the Central Bank cash payment confirmation.