CBF Release in November 2017: Advance announcement of changes
Clearstream Banking1 would like to inform customers in advance of some updates that will be implemented on
Monday, 20 November 2017
with the CBF Release as these enhancements may lead to system changes for customers.
We will inform you about further updates that will come into effect as a result of the CBF Release in November 2017 and, if necessary, provide additional details on the changes listed below at a later date.
CASCADE-LION – Introduction of a new rejection code
In addition to the rejection code "RJ", the CASCADE-LION system will introduce a further rejection code "RC" in the reporting. The new rejection code "RC" will be used (in addition to the currently used code "RJ") only when the non-CCP stock exchange trade is rejected by T2S due to error code MVCV205 “The ISIN code indicated in the settlement instruction does not exist in T2S”. This situation occurs for non-CCP stock exchange trades where the issuing process of the related security is not finalised on T2S. For all other rejection reasons the current code "RJ" remains as today.
The new rejection code is valid for:
- LION host screens;
- Function of the CASCADE-PC application – stock exchange transactions: information;
- Print report “Lieferliste”;
- MT537 for pending LION trades.
SWIFT Release 2017
With the SWIFT Release 2017 and in accordance with the changed standard, the qualifier QINS (Quantity of financial Instrument) in field :36A: in sequence D of the MT565 is no longer mandatory, but optional. In future it will be possible to also send an instructed amount with the qualifier QCAS in field :19B:. As CBF currently does not process events with an instructed amount, the qualifier QINS must be sent furthermore with the MT565. An MT565 with the Qualifier QCAS will be rejected by CBF and an MT567 REJT with the reason code DQAM (Instruction Type Rejection) will be sent.
In the MT564 for event type 222 the qualifier NEWO in field :92D in sequence E will no longer be sent.
Settlement Message Types
The SWIFT Release 2017 changes have no impact on the CBF settlement and processing. Therefore, no adaptations are planned for these message types.
However, there will be a slight adjustment in the MT548 positive business validation feedback to follow the SWIFT standard. The qualifier INST in field:23G: will be replaced by CAST for feedbacks related to cancellations.
Investment tax reform
Income Event Execution
Due to the reform of the investment tax, which will become effective on 1 January 2018 there will be changes to the settlement of CBF income events.
On the fund distribution side, where cash is distributed to the CASCADE accounts with positions in the related fund via event type 121 (CAEV = DVCA), CBF will no more deduct withholding tax for foreign accounts. The distribution takes place gross via CBF for all customer accounts.
The distribution of tax liquidity for accumulating funds, executed by CBF via event type 127 (CAEV = ACCU), will not be applicable anymore for income with fiscal payment date as of 1 January 2018. Distribution of tax liquidity due to corrections, or due to income with fiscal payment date prior to 1 January 2018 can still take place in 2018.
Dividend and similar income out of investments in equities, participation rights and convertible bonds, which are deposited by a fund with a valid status certification for its clients, can be executed by CBF with reduced tax rates (0%, 15%). Therefore, it is necessary, that the related securities, held by the fund, are deposited via a foreign CBF customer, that the tax reduction is requested by the CBF account holder per event, and that the valid certifications are available to classify the fund according to the new investment tax law (public fund, special investment fund with transparency option).
Details about the execution of tax reductions, impacts for the automated tax credit process during the market claim period and details about the breakdown instruction process will be published at a later point in time. The procedure for German withholding tax deduction, tax voucher and tax refund, changed in the context of the OGAW-IV-UmsG in 2012, will remain unchanged for CBF customers, which are resident taxpayer2.
With the CBF release in November 2017, the Taxbox service will be prepared for enhancements linked to the German Investment Tax Reform Act (InvStRefG). The related changes will only come into effect on 1 January 2018, that is, with the commencement of the German Investment Tax Reform Act. A pre-issue of the technical specifications concerning message formats and XML structure are available on the Taxbox page.
From 1 November until 17 November 2017, we offer customers a simulation test phase for changes related to the November Release 2017. The simulation will be set up in the CBF IMS23 simulation environment in accordance with the usual provisions.
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.
2. A resident taxpayer is a person, which has a domestic residence or the habitual abode in Germany respectively in case of a legal entity a domestic place of business or a domestic place of management.