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5.    CLEARING AND SETTLEMENT OF TRANSACTIONS WITH SECURITIES

5.1. The Depository shall perform clearing and settlement of transactions with securities.

5.2. All transactions with securities concluded on the Macedonian Long-Term Securities Stock Exchange AD Skopje (hereinafter: the Stock Exchange) shall be subject to clearing and settlement in the Depository.

5.3. The transactions with securities concluded on the Stock Exchange shall be settled according to the Law on Securities and Stock Exchange procedures, i.e. pursuant to the assumed settlement day.

5.3.a The settlement of all transactions with government securities in the Depository shall be carried out in accordance with the conditions determined by the Privatization Agency of the Republic of Macedonia.

5.4. The Depository shall perform clearing and settlement of transactions with securities on the basis of the data on concluded transactions received from the Stock Exchange.

The data on the concluded transactions with securities shall be submitted by the Stock Exchange to the Depository in electronic form on the day when they are concluded, no later than 3.30 p.m. The manner of submission and confirmation of the received data on the concluded transactions with securities shall be subject to agreement between the Stock Exchange and Depository.

5.5. The data on the concluded transactions with securities on the Stock Exchange referred to in item 5.4. shall contain at least the following information:

-           Securities ISIN

-           Identification number of the Stock Exchange transaction

-           Amount

-           Identification number of the broker-buyer

-           Number of the buyer's securities account with the Depository

-           Identification number of the broker-seller

-           Number of the seller's securities account with the Depository

-           Trade price on the Stock Exchange

-           Price per unit (per security)

-           Trade date

-           Planned settlement day

-           Transaction status

5.6. After the receipt of the data on the concluded transactions from the Stock Exchange, the Depository shall archive them and shall commence the clearing and settlement procedure.

5.7. After the receipt of the data from the Stock Exchange it shall be considered that the concluded transactions with securities on the Stock Exchange are irrevocable and the participants in the operations of the Depository cannot make any changes unilaterally, i.e. cannot cancel them.

5.8. Notwithstanding item 5.7, the Depository may make changes or cancel the transactions with securities only in case of request from the Stock Exchange, with a purpose of removing the errors made by the participants in concluding the transaction or in case of possible unpredictable errors in the Stock Exchange trading system.

The manner and procedure of canceling or changing the transaction referred to in paragraph 1 of this item shall be determined jointly by the Stock Exchange and the Depository.

5.9. The change or cancellation of the transaction may be made 3 hours at the latest before the settlement hour on the settlement day or after the settlement day.

5.10. In case of change or cancellation of the transaction, the Depository is obliged to perform new calculation of the liabilities arising from the transactions and to inform the Stock Exchange and the participants in the settlement of the transaction thereof.

5.11. The procedure of clearing and settlement of the transactions with securities in the Depository shall provide for final and irrevocable exchange of securities for funds in accordance with the conditions under which the transaction on the Stock Exchange was concluded and with these Rules.

5.12. Only securities maintained in certain securities accounts with the Depository which are free of any encumbrances and limitations can be used in the procedure of clearing and settlement of the transactions.  

5.13. The settlement of concluded transactions with securities on the Stock Exchange shall be carried out in the Depository on gross basis, i.e. all participants in the settlement of transactions with securities shall perform transfer of the securities and funds on the basis of each separate transaction concluded on a certain trade day.

5.14. All participants in the settlement that have concluded transactions with securities on a certain trade day will have to provide certain amount of securities (if they are sellers) and certain amount of funds (if they are buyers) for each transaction on the settlement day.

5.15. The participant - buyer of securities in certain transaction must provide the necessary funds in his settlement account with NBRM, by the settlement day.

5.16. The Depository shall submit detailed notification about his responsibilities to every participant in certain transaction with securities on certain settlement day, by 9 a.m. at the latest on the day after the trade day, in electronic form.

The notification referred to in the previous paragraph of this item shall contain the following elements:

-           Data the brokers will receive (on screen) after the settlement

-           Note

-           Ticker code

-           ISIN

-           Identification number of the transaction

-           Identification code of the broker - buyer

-           Number of the buyer’s securities account from the Depository

-           Identification code of the broker – seller

-           Number of the seller’s securities account from the Depository

-           Amount

-           Trade price

-           Accrued interest

-           Total price (price with included interest rate)

-           Trade date

-           Planned (agreed) settlement day

-           Actual settlement day

-           Transaction status

-           Forced

-           Identification number of the transaction in the Depository

5.17. With respect to the debt securities with periodical interest payment, the amount of the accrued interest shall also be included in the total liabilities of the participant in the settlement.

5.18. The participant in the settlement process is obliged to check the accuracy and completeness of the notification referred to in item 5.16. of these Rules, i.e. to inform the Depository if he has not received the notification or/and if he contests the accuracy and completeness of the notification. If within 3 hours from the moment when the notification  became available to the participant in the settlement, the participant did not contest the accuracy and completeness of the notification, it shall be considered that it is accurate and complete.

5.19. With the confirmation of accuracy and completeness of the notification referred to in item 5.16, the participant in the settlement process is obliged to fulfill his responsibilities contained in the notification, and thus he shall renounce the right to objection to his rights and responsibilities contained in the notification.

5.20. The participants in certain trade transaction with securities are obliged to indicate the accounts maintained in the Depository on which the amount of securities bought or sold should be distributed (distribution of transactions).

5.21. The participants in the settlement may distribute the securities from the concrete transaction only to those account holders who have given them written permission for that.

5.22. As a rule, the distribution of the transactions shall be carried out during the trading on the Stock Exchange, i.e. the Depository shall receive those data upon the submission of the data referred to in item 5.4 of these Rules.

5.23. As an exception from the previous item from these Rules, with respect to certain transactions with securities concluded on the Stock Exchange (what are known as group or block transactions), the distribution of the transactions in the securities accounts shall be carried out directly by the participants in the settlement in the Depository.

5.24. In the cases referred to in item 5.23. of these Rules, the participants in the settlement shall have to group or distribute the securities from or on certain securities accounts of their clients.

5.25. In the cases referred to in item 5.23 of these Rules, the Depository shall open special accounts for settlement of group and block transactions with securities to the participants in the settlement:

-    Account for grouping securities from several accounts of several clients by what are known as non-trade transfers with an objective to provide the necessary amount of securities when the selling group or block transaction is settled;

-     Account for distribution of the securities after the settlement of buying group or block transaction followed by distribution of the securities in several accounts of several clients by what are known as non-trade transfers.

5.26. The special securities accounts referred to item 5.25 of these Rules, shall be  specially marked in the Depositary and the participants in the settlement can use them only for non-trade transfers from and to certain securities accounts of their clients.

5.27. The participant-seller of securities in certain transaction must ensure that the necessary securities are recorded in his securities account with the Depository, i.e. in the securities account of his client with  the Depository, on the settlement day.  

5.28. The Depository shall check if the necessary securities are recorded on the securities account of the participant-seller i.e. on the securities account of his client immediately after the receipt of the data from the Stock Exchange in accordance with item 5.4 of these Rules and if on the account that is checked there is enough amount of securities, that amount shall be blocked until the settlement day.

5.29. If the Depository determines that on the securities account of the participant – seller, i.e. on the securities account of his client there is not enough amount of securities, it shall inform thereof the participant-seller who is obligated to carry out all activities, with a purpose of providing enough amount of securities on the settlement day.

5.30. The transfer of the securities from the securities account of the participant-seller i.e. his client, to the securities account of the participant-buyer, i.e. his client, shall be conducted by the Depository on the settlement day.

5.31. The transfer of the funds from the special accounts of the participants-buyers during the settlement of certain transactions with securities to the accounts of participants-sellers with the National Bank of the Republic of Macedonia, shall be carried out by an order of the Depository on the settlement day.

The transfer of the government securities will be carried out on the order by the Privatization Agency of the Republic of Macedonia, in accordance with the conditions under which the transaction with securities is concluded.

5.32. If the conditions for carrying out the settlement are met on the settlement day, the account operator shall perform securities transfer from securities account indicated by the participant-seller to the securities account indicated by the participant-buyer and simultaneously, he shall give an order to the National Bank of the Republic of Macedonia for transfer of funds from the settlement account of the participant-buyer to the settlement account of the participant-seller(delivery versus payment).

The transfer of securities and funds referred to in the previous paragraph of this item of these Rules shall be final and irrevocable.

5.33.  The Depository shall carry out the procedure for settlement of transactions with securities in chronological order in which they were concluded on the Stock Exchange, i.e. on the basis of the data received from the Stock Exchange in accordance with item 5.4 of these Rules.

If there are not enough funds or securities on the day of securities settlement for chronological settlement of the transactions, the Depository can proceed with settlement of the other transactions for which it has enough funds or securities.

5.34.  The Depository shall perform settlement of all transactions with securities which, in accordance with the conditions determined when the transactions were concluded, should be settled on that settlement day.

If the conditions for full settlement are not meet on the settlement day, the transaction shall not be settled. The Depository shall inform the participant in the settlement and the Stock Exchange that there are unsettled transactions on that settlement day and about  the reasons why the transactions are not settled.

The transactions referred to in the previous item shall be settled on the day when the conditions for settlement are met, but no later than 5 days after the initial settlement day.

5.35. The participants in the clearing and settlement procedure shall distribute the amount of securities which is agreed when concluding the transaction to one and/or several holders of securities accounts maintained in the Depository. The Depository shall not be responsible for the accuracy, precision and completeness of the procedure for distribution of the securities between the participants in the settlement and their clients.

5.36. The pecuniary claims and liabilities resulting from the procedure of clearing and settlement of the transactions with securities shall refer to the participants in the settlement and their clients. The Depository shall not be responsible for the accuracy, precision and completeness of fulfilling the mutual pecuniary responsibilities between the participants in the settlement and their clients.

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