Rollout of OneClearstream service level and enhanced Investor CSD solution in 2017-18
Clearstream Banking1 informs customers in advance about product enhancements that will be implemented in 2017 and 2018, with the rollout of the OneClearstream service level and the implementation of our revamped Investor CSD solution. Both product rollouts are intended to bring multiple benefits to our customers and will include some mandatory system changes and adaptations, especially in the areas of asset servicing and connectivity. We provide below a high-level description of what both changes will imply from a customer viewpoint as well as the main benefits that these product enhancements will deliver. Clearstream Banking will provide further information about detailed functionality changes, technical specifications and migration approach in the course of 2017 to allow for appropriate preparation and a smooth business transition.
OneClearstream service level for Issuer-CSD (that is, applicable to all securities issued in collective safe custody where Clearstream Banking is the Issuer CSD, hereafter referred to as “DE securities”)
On 6 February 2017, Clearstream Banking migrated to TARGET2-Securities (T2S) bringing to customers long-awaited benefits such as auto-collateralisation, cross-market asset pooling and harmonised processes across different T2S markets. The enhanced product will leverage the OneClearstream service level offering full harmonisation of services and connectivity channels between the CSD, Clearstream Banking AG (CBF; CASCADE) and the ICSD, Clearstream Banking S.A. (CBL and CBFi; Creation). It will provide customers with a single point of access to central bank money settlement across all T2S markets covering the widest possible range of T2S eligible instruments and also the international markets.
In addition, from Q2 2017 onwards, customers will have the option to select the new OneClearstream service level for DE securities, in order to benefit from enhanced service levels on the CSD and full harmonisation of services and connectivity channels between the CSD (CBF; CASCADE), and the ICSD (CBL and CBFi; Creation). Customers who do not wish to take advantage of this new service offering will continue to benefit from existing asset servicing and connectivity services.
Note: The activation of the OneClearstream service level for your DE securities portfolios will have to be planned with your Relationship Manager.
Enhanced Investor CSD solution (that is, applicable to all other T2S-eligible securities, including Eurobonds, whether held in collective safe custody or non-collective safe custody)
Starting in Q1 2018, Clearstream Banking will gradually roll out its revamped Investor CSD solution, on a market by market basis. This enhanced product – which will leverage the OneClearstream service level – will provide customers with a single point of access – in central bank money – to all T2S markets (with comprehensive instruments coverage) and to the international markets, with full harmonisation of services and connectivity channels between the CSD (CBF; CASCADE) and the ICSD (CBL and CBFi; Creation). In addition, customers will benefit from full interoperability between the CSD and the ICSD liquidity pools, as Clearstream Banking integrates its collateral management and securities lending services. Customers will be able to finance, lend and borrow assets in a seamless way regardless of whether they are held in accounts at the ICSD or the Investor CSD.
For customers holding assets in the existing CBF Investor CSD, the implementation of our enhanced Investor CSD solution will translate into a mandatory migration, market by market, towards the new operating model. Such migration will likely require adaptations to processes and systems. The first local markets for which our enhanced Investor CSD solution will be rolled-out are (alphabetical order) Belgium, France and Netherlands (local partner: BNP PARIBAS Securities Services).
Further details and a timeline regarding additional markets becoming part of the Investor CSD solution will be published soon. Also detailed service specifications, testing and migration information per market will be communicated shortly.
Note: All markets which have not yet been migrated to OneClearstream (T2S and Non-T2S markets, for example, Spain, Switzerland - for non-EUR activities, and USA) will continue to be offered under Clearstream Banking’s existing service level until further notice.
Customers currently not holding assets in the CBF Investor CSD but who are planning to use the Investor CSD solution in future on permanent or occasional basis will also likely require adaptations as outlined for active users.
Customer benefits at a glance
Harmonised service levels for enhanced Issuer- and Investor-CSD solution
- A single gateway to access and settle all T2S markets plus the Eurobonds market, in Central Bank Money (CeBM); harmonised settlement processing, aligned with T2S requirements;
- An extended market coverage within each country, both in terms of asset classes (for example, Italian fixed income instruments) and trading flows (for example, stock exchange and CCP flows, primary auctions);
- A single, fully integrated liquidity pool between the Clearstream Banking CSD and the ICSD environments, with no dependency on local CSDs to realign securities where they are needed;
- Pooling of securities collateral across T2S markets facilitates optimal use of assets in T2S auto-collateralisation, bilateral use and triparty collateral management including GC Pooling;
- Cash pooling in CeBM;
- Upgraded asset servicing (income, corporate actions, tax, proxy voting) with full events scope coverage and lifecycle management, harmonised with ICSD standards, provided in partnership with leading local agents; STP processing for best deadlines close to the market; Full adherence to SMPG/ NMPG guidelines; reporting upgrades; enhanced transaction management (market claims, transformations, buyer protection);
- New comprehensive connectivity solutions via the single user interface (Xact Web Portal), Xact File Transfer and Xact via SWIFT fully harmonised between the CSD and ICSD.
Harmonised collateral management services from a single platform
- Full triparty interoperability between Clearstream Banking’s CSD and ICSD;
- A single collateral management system will manage the customers’ entire collateral pool across Clearstream Banking’s CSD and the ICSD with automatic realignments, resulting in an optimised use of collateral across locations and in enhanced liquidity management;
- Customers can choose between settlement in commercial bank money and central bank money for their Euro triparty repo activity. With the latter option, customers can centralise the settlement of their entire Euro repo activity (bilateral repo, uncleared and centrally cleared triparty repo) on the same account in central bank money to benefit from cash and balance sheet netting.
Harmonised securities lending services
- Clearstream Banking will offer a fails lending service to enhance settlement efficiency on T2S, which will have an equivalent service level to the current ICSD service. The service will encompass both fixed income and equity assets.
- Fixed income and equities held at the ICSD and at the CSDs will be merged into one single pool of liquidity to maximise borrowing opportunities.
Use Vestima for all your investment fund orders
- Access the widest range of investment funds, independent from whether the investment fund management chooses to issue in T2S-In CSDs (for example, OeKB or LuxCSD), outside T2S (international funds issued in TA model) or even internationally, similar to Eurobonds, via a Global Note structure;
- Benefit from harmonised services for all asset types including investment funds – in a single account for settlement, connectivity and asset servicing;
- Substantially reduce the time needed to achieve secondary market settlement of investment funds through Clearstream Banking’s nominee omnibus account structure.
For further information, customers may contact Clearstream Banking Client Services or their Relationship Manager.
1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.