Latvia: Change of national currency : Conversion of LVL to EUR and redenomination procedures
We hereby remind customers of Clearstream Banking1 that, effective
1 January 2014
Latvia will convert its national currency from the Latvian Lats (LVL) to the Euro (EUR) based on the official (Central Bank) conversion rate fixed at EUR 1.00 = LVL 0.702804.
As part of the EUR conversion, all securities currently denominated in LVL will be redenominated into EUR and a special end of year conversion calendar will apply in the Latvian market.
This is further to our Announcement L13097, dated 10 July 2013, and previous related Marketflashes.
Special end of year / new year calendar
In the context of this conversion and redenomination, customers should please be aware of the following dates for cash clearing in LVL and securities trading and settlement activities in securities currently denominated in LVL.
| Date | Activity | |
| 2013 | ||
| 19 December | Last business day to enter trades for T+3 settlement with settlement date 30 December 2013. | |
| 20 December | Last business day to enter trades for T+2 settlement with settlement date 30 December 2013. | |
| 23-26 December | Public holidays in Latvia. | |
| 27 December | - | Last trading day in LVL and for 2013 in Latvia for T+1 settlement with settlement date 30 December 2013. Any new or remaining active trades in LVL will be cancelled at the end of this business day and will need to be re-entered in EUR in 2014. |
| - | Last day to settle Bridge transactions in LVL with EB participants with value date 27 December 2013. | |
| 30 December | - | Last day to settle LVL cash transactions with early closing deadline at 10:30 CET. After this deadline, any new or pending LVL cash transactions will be rejected and will need to be re-entered in EUR as from 2 January 2014. |
| - | Last business day to settle securities transactions in LVL in Latvian equities and corporate bonds (in addition to free of and against payment in EUR). No early closing is applicable. After the (usual) deadline, any new or pending internal or domestic securities settlement transactions against payment in LVL will be rejected and will need to be re-entered by the customer with the applicable EUR countervalue and with value date as from 2 January 2014. | |
| Note: 30 December 2013 is a public holiday in Latvia but the Latvian Central Depository (LCD), the Latvian Central Bank and our local custodian bank will be open to process the above transactions. | ||
| 31 December | Public holiday in Latvia. | |
| 2014 | ||
| 1 January | EUR will be adopted in Latvia – Public holiday in Latvia. | |
| 2 January | - | First settlement day for cash transactions in EUR in Latvia. |
| - | First settlement day for free of payment transactions and for against payment transactions in EUR. | |
Cash conversion rules
Cash balances in LVL will be automatically converted into EUR using the official Central Bank rate.
Rounding is made to the nearest EUR cent, taking into account the third decimal place value:
- If third decimal is from 0 to 4, the amount in cents does not change.
- If third decimal is from 5 to 9, the amount in cents is rounded up to the next unit.
Cash Bridge transactions in LVL
Bridge cash transactions in LVL will be authorised until 27 December 2013 inclusive.
Any Bridge cash instructions entered with value date after 27 December 2013 will be rejected and will have to be re-input in EUR with value date as from 2 January 2014.
Note: There is no impact on securities settlement instructions as the Bridge is closed for the Latvian market and there are no current active Eurobonds denominated in LVL.
Securities redenomination
Equities
As from 1 January 2014, nominal capital values will be expressed in whole Euros.
Government bonds
The face value of debt securities denominated in LVL and registered in the Latvian Central Depository (LCD) will be automatically converted into EUR cents based on individual owner’s nominal amount of securities.
To facilitate the conversion, there will be a temporary freeze of transactions and acceptance of government bonds denominated in LVL in Clearstream Banking until 1 January 2014.
Corporate bonds
All corporate bonds are already denominated in EUR or other foreign currency and so will not be impacted. Any corporate bonds denominated in LVL will follow the rule as above for government bonds.
Income and other cash proceeds
Income payments and other cash proceeds (including tax reclaims) will all be processed in EUR, the official circulating currency as from 2 January 2014. In the case of pending events, the conversion from LVL to EUR will be done based on the official Central Bank rate.
Further information
We will provide further details of the cutover procedure in due course.
Our Market Guide information for Latvia will be updated accordingly when the conversion becomes effective.
For further information, customers may contact Clearstream Banking Customer Service or their Relationship Officer.
------------------------------------------
1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).
| As a registered customer, subscribe to our free email alerts service to receive immediate, daily and/or weekly notification of the latest customer publications on our website. Unsubscribe at any time; we respect your email privacy. |