- If DTC makes a borrowing as a result of the failure of a Settling Bank or Participant to complete timely settlement the Settling Bank or Participant will be charged interest on that borrowing as follows:
Interest Rates for Borrowings Made Due to Untimely Payment of Funds
Note: A Settling Bank will not be charged interest under this provision with respect to the settlement balance of a Participant or Participants for which the Settling Bank settles where the Settling Bank timely notified DTC of its refusal to settle on behalf of such Participant or Participants.
Interest is calculated overnight on a 360 day/year basis. For a net debit of $100 million, the interest calculation is:
[($5 mm x 2%) + ($20 mm x 1.5%) + ($50 mm x 1%) + ($25 mm x 0.5%)] /360
which equals $2,847.
- a. Settling Banks and Participants are charged flat fees in accordance with the table below if their net settlement obligations are not timely satisfied. This fee is in addition to any interest charged pursuant to Item 1 above.
b. In addition to Item 2a. above, a Settling Bank that settles on behalf of other Participants shall also be charged flat fees in accordance with the table below if it does not, by the Acknowledgment Cutoff Time, (i) affirmatively acknowledge its net-net settlement balance or (ii) notify DTC that it refuses to settle for one or more Participants for which it is the designated Settling Bank. The Settling Bank will not be charged a fee for failure-to-acknowledge or notify DTC of its refusal if it notifies DTC in accordance with Item 7 or Item 9 of the Acknowledgment and Refusal Procedures above that it cannot acknowledge or refuse its net-net settlement balance. This fee is in addition to any fee(s) for failure to timely satisfy a net settlement obligation charged pursuant to Items 1 and 2.a. above.
Flat Fees–Untimely Satisfaction of Settlement Balance /Settling Bank Failure-to-Acknowledge its Net Debit or Credit Settlement Balance