The Reconfirmation and Pricing Service (RECAPS) is a mandated service for all participants that reconfirms and reprices participants' aged equity, municipal bond, corporate bond, UITs and zero coupon security transactions that have previously failed to settle in NSCC's clearance and settlement system or by other means.

Overview

The Reconfirmation and Pricing Service (RECAPS) is a mandated service for all participants that reconfirms and reprices participants' aged equity, municipal bond, corporate bond, UITs and zero coupon security transactions that have previously failed to settle in NSCC's clearance and settlement system or by other means. Unsettled fails previously compared in RECAPS are required to be submitted with a special indicator.

All equities, corporate bonds, UITs and municipal bonds are eligible for RECAPS. Zero coupon securities that are eligible for the service include Certificates of Accrual Treasury Securities (CATS), Certificates on Government Receipts (COGR), Coupon Treasury Receipts (CTR), Principal Treasury Receipts (PTR), Treasury Bond Receipts (TBR) and Treasury Investment Growth Receipts (TIGR). ACATS fails (except safekeeping items) in the above securities are also eligible. RECAPS will not process foreign securities, mutual funds, reorgs and book-entry government securities.

RECAPS provides a Reject and DK (don't know) capability for advisories received and requires participants to effectively respond to all open fails submitted by the contra party. Advisories that are either "unresponded to" or DK'd are subject to close-out action, under the rules of the appropriate marketplace. RECAPS provides for a one-day settlement capability for all compared fails.

Who Can Use the Service

All qualified NSCC members are required to participate in the service quarterly. Members must be able to settle through NSCC to participate.

Benefits

In addition to reducing exposure on aged fails, RECAPS provides participants with the following advantages:

• Reconfirms and re-prices all compared fails
• Eliminates fails in CNS-eligible issues
• RECAPS fails are converted to non-aged fails that are recognized by regulators for calculating net capital reserve requirements
• Aged problem fails are easily identified by RECAPS through the Repeat Fail indicator submission
• RECAPS provides participants and regulators with a report that summarizes the overall activity for a participant during the RECAPS cycle

How the Service Works

Participants submit equity, municipal bond, zero coupon, corporate bond and UIT fails that are five business days old or older.

• On Friday, participants must review fail files and submit all open aged fails for eligible products.
• On Saturday, NSCC will distribute contracts, CNS and non-CNS compared trade summaries and balance orders.
• On Monday, participants must take supplemental action for uncompared items and as-of fails. Participants can choose to DK or Reject an advisory by citing the control number of the transaction. Failure to respond to an open advisory will result in the item being treated as if it were DK'd.
• Tuesday is the last day of the RECAPS cycle.

For More Information:

Please call Relationship Management at 1 888.382.2721.