DSTA announces outsourcing strip facility to Euroclear Nederland and introduction of strip fungibility
From 3 May 2016 onwards, the DSTA will outsource all stripping activities to Euroclear Nederland. Primary Dealers can request the DSTA for strip and reconstitution activities up to and including 28 April 2016 until 12:00 CET.
A period of two days (29 April and 2 May) will follow, on which days no strip and reconstitution requests can be made. Starting 3 May 2016 all requests can be made to Euroclear Nederland. From that moment on all new strips will be fungible if they are of the same type: non-CACs and CACs strips will not be interchangeable. The DSTA envisages this will increase the liquidity of the strips, as well as of the bonds itself.
The new stripping method will introduce fungibility of interest and principal strips. In order to be able to reconstitute the current non fungible strips into Dutch bonds, investors first have to switch them into new fungible strips via a Primary Dealer.
For more information on the changes and instructions for requesting strip and reconstitution activities we kindly refer to the newsletter from Euroclear Nederland on this website.