DTC automatically gives priority to transactions that are recycling as a result of risk management controls as follows:
- Specific types of transactions are given priority over others. See the Prioritization Schedule for the priority order.
- Within the transaction types, transactions are given priority on the basis of:
- Settlement value (for valued transactions), or
- Market value (for free transactions, such as free deliveries or withdrawals).
Note- This prioritization schedule defines only the order in which DTC attempts to complete recycling transactions. DTC completes any transaction it can. If the first transaction on the recycling queue cannot be completed, DTC will move to the next transaction and attempt to complete it.
Warning! If you have multiple Participant accounts, you must be aware of how your account structure affects your recycling transactions. If you have grouped your accounts into a family structure (see Grouping Accounts into Collateral Families), all your accounts within that family share the same collateral monitor and net debit caps. This also means that all transactions within a family share the same risk management recycling queues.
For example, suppose you have accounts A and B in a collateral family and have two RVP deliveries recycling against your net debit cap, one for account A and one for account B. The larger of these deliveries is placed first on the recycling queue. Hence, when settlement credits are applied against either account A or account B, the larger delivery is attempted first.