Delivery and settlement procedures

Government securities transactions are settled through Relit Grande Vitesse (RGV), the new gross settlement system for fixed-income securities developed by Euroclear France in partnership with the Banque de France. RGV became operational for OATs on 9 February 1998 and on 30 June 1998 for BTANs and BTFs.

Euroclear France also acts as a central securities depository for OATs, BTFs and BTANs. RGV participants can open different accounts to segregate their proprietary and agency assets, including a separate account for each type of client.


• RGV participants are:
- financial intermediaries (SVTs and other banks, custodians, brokers, etc.);
- issuers, to manage their registered securities issues;
- foreign depositories and international clearing organizations (Clearstream International and Euroclear Bank).

The Banque de France is a key player in this system. It has three responsibilities: it acts as a payment agent, it acts as a counterparty for intraday repos and it initiates transactions on the money market (invitations to bid, bilateral transactions, standing marginal loan facilities).
Every investment firm with a European passport can become an RGV participant since the introduction in January 1996 of the European directive which provided for freedom of establishment and mutual recognition of authorizations.


• RGV is used to process all government securities (and fixed-income) transactions between financial intermediaries:
- purchases and sales on the primary, gray and secondary markets;
- free-of-payment transfers;
- repos;
- private securities loans;
- and all monetary policy transactions.

Thanks to payment of cash in domestic currency, RGV ensures real-time irrevocability of settlement, permits direct payment in the national currency and ensures intraday links with the TBF system of the Banque de France. Moreover, its collateralization technique improves the flexibility of RGV participants and so helps them optimize management of their positions. It enables them to use all or part of the securities on their account or the securities they are buying to guarantee their buy transaction.

Thanks to its links with TBF, the French connection to the TARGET system - which since 1 January 1999 connects the cash settlement systems of all European central banks - RGV will be the main tool to implement monetary policy and to manage intraday liquidity in euros, notably by collateralizing securities in favor of the Banque de France. RGV participants will have a fully protected framework for their securities and cash transactions with all institutions throughout the European Union.


• Transactions can be settled the same day (D) or during a period between D and D+100, at the discretion of the participants.
Transactions at the day's value can be sent to the system until 5:00 p.m.
RGV participants use standard messages and the Sigma network or their RGV workstation to send their instructions to the system. As of end-1999, it will also be possible to access RGV via SWIFT.


• Thanks to a combination of instant irrevocability and real-time processing, RGV offers all operators an ideal base to optimize cross-border transactions safely via links with other national depositories and international clearing organizations (Clearstream International and Euroclear Bank). These links enable international operators to carry out transactions directly with domestic counterparties.