Trade Flow

1. The starting point of any transaction is the Exchange order. By entering an order, a trader orders the Exchange system to buy or sell a certain number of securities.
2. For each transaction, the SWX provides the contracting parties with confirmation in the form of trade slips. A trade slip contains all important information relating to the transaction. The SWX reference is included on the trade slip to ensure that each transaction is uniquely identifiable.

A trade slip is divided into three areas or blocks of information. The top part contains information on the transaction, the middle part information on settlement and the bottom part information on the parties to the transaction.

3. The SWX supplements the transaction data with the delivery and payment instructions necessary for clearing. The settlement request is generated by the SWX and continuously transmitted to SECOM as a so-called locked-in trade (a trade where settlement instructions are generated simultaneously and irrevocably by the two contracting parties).
4. Upon receiving the SWX order, SECOM automatically generates a receive-versus-payment (RVP) order for the buyer and a delivery-versus-payment (DVP) order for the seller and confirms them vis-à-vis the SWX.
5. SECOM confirms the received delivery order vis-à-vis the buyer/seller. SWX clearing orders cannot be cancelled in SECOM by the participants. The SWX can cancel the transaction in SECOM only if both parties lodge substantiated written applications with the SWX on the same day.
6. The seller's securities position is checked on the value date (T+3). If the securities are in the safekeeping account, they are blocked.
7. SECOM then transmits a payment order to SIC. Since SECOM must accommodate itself to the SIC schedule, reports can only be transmitted to SIC before 2 p.m. (for SECOM customers, this means that orders against payment in CHF must achieve "matched" status before 2 p.m. on the value date and the seller must have a sufficient number of securities. If the number is insufficient, the missing securities can be acquired by means of securities borrowing). If the security positions are not available by that time, clearing cannot take place on the value date.
8. SIC checks the buyer's coverage. If it is adequate, SIC debits the buyer and irrevocably credits the amount to the seller. If the coverage is not adequate, the position is queried by the end of SIC clearing (about 4 p.m.). The buyer, therefore, has until the end of clearing to add liquidity to its SIC account. If the buyer's account has inadequate coverage at the end of clearing, the blocked securities are released again in SECOM. The next day, any orders forwarded by the SWX are returned to the SWX, which notifies the involved parties accordingly. In the case of transactions not forwarded to SECOM by the Exchange, SECOM again blocks the securities at the start of production on the next day and transmits a new report to SIC. In such cases, the order cannot be executed by the value date. SECOM tries to execute the order during a period of 60 banking days. Upon lapse of this period, the order is automatically cancelled by SECOM.
9. When a report based on a successful, final, irrevocable money entry is received SECOM carries out a definite and irrevocable re-registering of the securities (simultaneous final irrevocable delivery versus payment, SFIDVP). The customers are informed, online and in real time, of all changes of the status of clearing and settlement orders by means of electronic status reports. The reporting workflow involves the delivery of the SWX reference, which allows automated tuning and monitoring of the process chain, along with each electronic report from the involved interfaces.