Ceasing of Settlement

Below you will find some useful information on settlement which is covered by the Exchange's default rules.

Euroclear UK and Ireland (EUI, operator of CREST)

EUI has provided the Exchange with information on the unsettled trades Madoff Securities had within its CREST account that were flagged with the Trade System of Origin (“TSO”) of “S” (London Stock Exchange). At the present time member firms can have no certainty that all transactions they undertook with Madoff Securities that are flagged in CREST with the TSO of "S" are covered by the Exchange's default rules as the Exchange is aware of instances of the TSO flag being inappropriately used.

Transactions cleared through a Central Counterparty (CCP)

It is important to note that where a defaulter's market side transaction was novated to a CCP, this will be subject to the default procedures of that CCP if and when the CCP also declares a default. This is in accordance with rule D115.5(2).

Other CSDs
The Exchange is not aware currently of any unsettled on Exchange trades undertaken by Madoff Securities that were due for settlement in another CSD. However, it is possible that such trades exist and counterparties to such trades should provide associated details to the Exchange promptly. Please refer to the separate sections for ‘Member Firm Counterparties’ and ‘Non-Member Firm Counterparties’ respectively.