For CCP-eligible instruments settled through SIX x-clear Ltd, when is a buy-in triggered if the seller cannot deliver?

For CCP-eligible instruments settled through SIX x-clear Ltd, when is a buy-in triggered if the seller cannot deliver?

• A. Trade date +7 days.
• B. On the settlement date.
• C. Immediately after the settlement date.
• D. Never.

Answer: (A)

The situation revolves around how a CCP-managed trade handles a delivery failure. When a trade is cleared through SIX x-clear for CCP-eligible instruments, delivery must occur by a defined deadline to keep risk in check. If the seller cannot deliver, the system uses a buy-in as a controlled mechanism to cover the short and protect the buyer and other participants. In this framework, the defined cure period ends seven days after the trade date. If delivery hasn’t been made by then, a buy-in is triggered, meaning a third party will step in to acquire the securities to complete the trade. This timing (trade date plus seven days) balances giving the seller a reasonable window to deliver with the CCP’s need to minimize risk and ensure timely settlement. It’s not tied to the settlement date, nor is it immediate after settlement, and there is a defined mechanism rather than never.

The situation revolves around how a CCP-managed trade handles a delivery failure. When a trade is cleared through SIX x-clear for CCP-eligible instruments, delivery must occur by a defined deadline to keep risk in check. If the seller cannot deliver, the system uses a buy-in as a controlled mechanism to cover the short and protect the buyer and other participants.

In this framework, the defined cure period ends seven days after the trade date. If delivery hasn’t been made by then, a buy-in is triggered, meaning a third party will step in to acquire the securities to complete the trade. This timing (trade date plus seven days) balances giving the seller a reasonable window to deliver with the CCP’s need to minimize risk and ensure timely settlement. It’s not tied to the settlement date, nor is it immediate after settlement, and there is a defined mechanism rather than never.