Settlement services - Japanese equities, ETFs and REITs

28.12.2018

Pre-matching service

The table below summarises CBL's pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. For details of CBL's pre-matching services, see Pre-matching services for external settlement instructions.

Service offeredMethod employedStart (local time)
Equities
Immediate Release Flag availablePSMS or
Manual via telephone
As soon as instructions are received by HSBC Japan (PSMS)
14:00 on SD-1 (Manual)
Connectivity mediumInstruction format
CreationOnline and Xact Web PortalTick to enable the “Immediate Release” option.
Xact via SWIFT and Xact File TransferField :22F::STCO/CEDE/IREL

Domestic allegement matching service

Where no pre-matching instruction has been sent to the market, CBL accepts allegements via its depository from domestic market counterparties. It will then use these allegement messages to search for the best matching customer instruction.

If no matching customer instruction is found, the allegement is reported to the customer provided that its Clearstream Banking account number is present.

For details of CBL's domestic allegement service, see Pre-matching services for external settlement instructions.

Procedures for domestic counterparties

Procedure for the domestic counterpartyDeadline
Receipt in CBL / Delivery from CBL
Customers delivering securities to, or receiving them from, the Japanese market must request their domestic counterparty to deliver the securities to or receive them from the CBL sub-account with HSBC, Tokyo as follows:Market deadline
-Delivering Agent/Receiving Agent: HSBC Tokyo (BIC: HSBCJPJT)
-Deliverer's Custodian/Receiver's Custodian: Clearstream Banking Luxembourg (BIC: CEDELULL)
-Seller/Buyer: Ordering party's/beneficiary's account number in CBL

Allowed countervalue difference

A maximum difference in countervalue of JPY 3,500 is allowed for matching and settlement of against payment transactions with domestic counterparties. In the event of a discrepancy within these limits, the receiving party’s cash amount shall generally prevail.

In addition, there is a market tolerance limit set set by JASDEC at JPY100. When pre-matching is conducted by PSMS, settlement amounts will be automatically adjusted up to JPY100 and for that, seller's amount is always prioritised.

Specific settlement rules / settlement restrictions

Foreign stocks listed on the Japanese market are not eligible for settlement and custody in Clearstream Banking.

Board lots and odd lots

Odd lots of shares are freely transferable within the book-entry system operated by JASDEC. If requested by a customer, the odd lots of shares can also be sold back to the issuing company. Any cash proceeds will be credited to the customer's cash account.

Back-to-back processing

Back-to-back processing is available for transactions in all book-entry equities settling in JASDEC. If both the customer and the domestic counterparty meet their settlement obligations and fulfil the market's back-to-back requirements within the relevant deadlines, the linked receipt and the linked delivery will settle with same-day value.

Deadlines for the receipt of valid instructions remain unchanged for back-to-back transactions (see Settlement times).

To benefit from this functionality, customers must ensure that their back-to-back transactions are formatted according to the following format, as appropriate:

Connectivity mediumPool ID formatField(s) to be used
CreationOnline16x a
and
Turnaround
Pool Reference

Type of Settlement Transaction
Xact via SWIFT and Xact File Transfer:POOL//16x a
and
:SETR//TURN
Field :20C: sequence A1

Field :22F: sequence E

a. The reference (16x) must neither start nor end with a single slash (/) character nor must it contain two consecutive slash (//) characters.

Management of failed instructions

Instructions in the domestic market that remain unmatched by the requested settlement date are reported to CBL.

Any instruction that reaches the depository after the deadline will be settled with the next possible value in the domestic market with no backvaluation. Unconfirmed instructions with domestic counterparties remain pending until they are settled or are cancelled.

Delivery instructions that remain unsettled on the requested settlement date are re-submitted by CBL to the Japanese market on each (as necessary) of the next five domestic business days. Any such instruction that remains unsettled after this period will be cancelled by CBL and the securities will be re-credited to the customer's CBL account.

New issues settlement

The earliest transaction settlement in new issues will, when appropriate, take place on listing date in the local market. For confirmation times, please refer to Settlement times.