(S = T + 2). However, it is possible for the parties to a trade to agree a different settlement period.
VPS carries out three settlement cycles in each 24-hour period:
• Settlement 1 – starts 06:00 hours (Deadline for notification is 20:00 hours on the last trading day before the settlement day)
• Settlement 2 – starts 12:00 hours (Deadline for notification is 11:30 hours)
• Settlement 3 – starts 14:30 hours (Deadline for notification is 14:15 hours)
The deadline for notification of trades for settlement on the same day is 14:15 hours.
First Settlement cycle:
06:00 Settlement cycle starts
06:30 Settlement is booked
06:45 All processed messages and MT598 End of Settlement sent
Second Settlement cycle:
12:00 Settlement cycle starts
All Settlement Instructions received within 12:00 will participate in the 2nd Settlement cycle.
12:15 Settlement is booked
12:30 All processed messages and MT598 End of Settlement sent
Third Settlement cycle:
14:15 System closed for registration of transactions to settlement cycle 3
All Settlement Instructions received within 14:15 will participate in the 3rd Settlement cycle
14:15 – 14:30 VPS sends out liquidity forecasts and push messages to settlement participants who need additional liquidity. Both the settlement participant and the liquidity bank will receive the notification from VPS.
14:30 Settlement starts
14:50 Settlement is booked
15:05 All processed messages and MT598 End of Settlement sent
VPS will produce liquidity forecasts for settlement cycle 1 according to the following schedule :
15:30, 16:15, 19:15 and 21:15
Liquidity requirements for settlement participants
Settlement participants must ensure that they make sufficient securities and liquidity available to the settlement system to cover the trade instructions they have notified for Settlement. The deadline for making additional liquidity available for Settlement 1 is within 20:00 hours on the preceding day, while the deadline for additional liquidity for Settlement 3 is within 14:30 hours on the settlement day. VPS offers two query types that settlement participants can use to evaluate the additional liquidity they might need to provide.
Settlement participants can view their calculated net position in VPO NOK by using the VPS Settlement system (VPS Oppgjør) and selecting the menu item ‘Pengeoppgjøret VPO NOK’. The forecast for Settlement 1 is available from approximately 15:30 hours on the day before the settlement day. The forecast for Settlement 3 is available from approximately 14:15 on the settlement day. The enquiry function provides information on the settlement participant’s net position and liquidity requirement at the specified times. The forecast is based on all the trade instructions that are ready for settlement and for which sufficient securities are available at the time of the calculation.
Settlement participants can also view their possible net position in VPO NOK, which gives information on what their liquidity requirement would be on the basis of all trades that have been entered into the system at the time of the enquiry. Unlike the calculated net position in VPO NOK, the possible net position does not take into account whether trading instructions have been confirmed or whether cover has been checked at the time of the enquiry to ensure that sufficient securities are available. The possible net position is updated in real-time until the system closes for input of new transactions at 20:00 hours.
Liquidity requirements for liquidity banks
Each liquidity bank must ensure that it makes sufficient liquidity available at Norges Bank to meet its customers’ cash requirements. The deadline for liquidity banks to provide liquidity on their accounts at Norges Bank for Settlement 1 is within 06:00 hours on the settlement day. The deadline for providing liquidity on these accounts for Settlement 3 is 14:30 on the same day.
The query function calculated liquidity requirement is available daily through VPS Settlement at approximately 15:30 hours and approximately 14:15 hours. The transaction provides information on a liquidity bank’s liquidity requirement based on the same calculation as is used for the calculated net position in VPO NOK for settlement participants.