Greece Exchange Settlement Resumes as Market Stays Closed

Greece’s exchange resumed settlement on trades that were held in limbo even as the country’s regulator kept its capital markets shuttered.

Settlement, the final transfer of assets between two parties, of stock and derivatives trades that took place June 25-26 began on Tuesday, Alexandra Grispou, a spokeswoman for Athens Exchange Group, said by e-mail.

The Greek exchange, the Bank of Greece electronic market for government bond trading and mutual fund redemptions are closed until July 6, according to the Hellenic Republic Capital Market Commission. Clearing and settlement on the Greek exchange are also suspended.

“Our main concern is to run smoothly all settlements in the securities and derivatives markets under the measures that are in place and that end clients receive their pending proceeds,” Grispou said. “We are in communication with all market participants, the regulator and the cash settlement system operator in order to run effectively the required processes.”

Greek markets ground to a halt this week as the government imposed capital controls to stem cash from pouring out of its banks and the country staggered toward a July 5 referendum on whether to repay creditors.

The country’s $42.5 billion stock market is smaller than Hewlett-Packard Co.’s market capitalization, and market pros are betting the global fallout from the country’s political turmoil will be contained. However, the ad-hoc arrangements on the Greek exchange demonstrates the challenges facing the country’s domestic financial system.