Settlement services - Estonia

22.10.2018

Matching service

Matching is mandatory for all transactions settling in T2S. In addition to the mandatory matching criteria in T2S the following fields may, if present, be matching criteria.

Additional matching field

The following additional matching fields are initially not mandatory but, when one of the counterparties provides a value for them in its instruction, matching values must be provided by the other counterparty.

  • Opt-out indicator;
  • CUM/EX indicator

In their instructions to CBL, customers may use the following fields:

Type and purpose of the additional matching field

Xact via SWIFT and Xact File Transfer

CreationOnline

Opt out indicator

Customer wishes to opt out from market claims or transformations

:22F::STCO//NOMC

Opt-out indicator

Cum indicator

Customer wishes to indicate its transaction as cum coupon

:22F::TTCO//CCPN

CUM/EX indicator

Ex indicator

Customer wishes to indicate its transaction as ex coupon

:22F::TTCO//XCPN

CUM/EX indicator

Optional matching field

The following optional matching fields must match when provided by both counterparties:

  • Common reference;
  • Client of delivering/receiving CSD participant;
  • Securities account of the delivering/receiving CSD participant.

Type and purpose of the optional matching field

Xact via SWIFT and Xact File Transfer

CreationOnline

Common reference

Customer wishes to indicate a reference agreed with the counterparty

:20C::COMM

Common Trade Reference

Client of delivering CSD participant

Customer wishes to specify the BIC11 or local code of the counterparty’s underlying client

:95a::SELL

Client of delivering CSD participant

Client of receiving CSD participant

Customer wishes to specify the BIC11 or local code of the counterparty’s underlying client

:95a::BUYR

Client of receiving CSD participant

Securities account of the delivering party

Customer wishes to specify the counterparty’s account

:97A::SAFE with:95a::DEAG

Securities account of the delivering party

Securities account of the receiving party

Customer wishes to specify the counterparty’s account

:97A::SAFE with:95a::REAG

Securities account of the receiving party

Allegements

CBL may receive counterparty instructions alleged on its account at NASDAQ CSD and will report them to customers provided that the customer’s CBL account is present in the allegement and the allegement subscription is in place on the customer account.
The allegements will contain the additional and optional matching criteria described above. These can be used to correctly format instructions to ensure matching if it has not yet been sent to CBL.

Identification of CSDs in T2S

In T2S all CSDs will be identified by their BIC11. Customers are required to use the following BIC11 as Place of Settlement for domestic instructions in NASDAQ CSD:

CSD

BIC11

NASDAQ CSD via T2S

LCDELV22XXX

Identification of the counterparty in T2S

In T2S, the CSD participants are identified exclusively by the combination of their home CSD (SWIFT: PSET or CreationOnline: Place of settlement), i.e. the PSET shall be the BIC of the CSD the counterparty uses to access T2S, and their BIC11 (SWIFT: REAG/DEAG or CreationOnline: Receiving/Delivering Agent).

If a customer uses a BIC8 to identify the Receiving/Delivering Agent, CBL shall be entitled to modify the BIC8 provided and the settlement instructions will be then processed by default with a BIC11 by adding the default XXX suffix to comply with T2S settlement rules. Accordingly, such customers remain liable for any settlement fails that the use of the BIC8 may cause and the customers furthermore agree to indemnify CBL against losses, liabilities, damages, penalties, expenses and all other costs on any kind suffered by CBL as a result of the customer not complying with the above requirement.

Procedures for domestic counterparties

Securities eligible in NASDAQ CSD

Procedure for the domestic counterparty

Receipt in CBL / Delivery from CBL

Deliver to / Receive from: BIC EEUHEE2XXXX

In favour of/By order of: BIC CEDELULLXXX and SAFE 99100039827

Note: T2S does not report the account field with second party level in the allegement messages and we therefore recommend customers to request their counterparties to include the CBL customer account number in field :70C::PACO instead of :97A::SAFE.

Partial settlement

This service is not available.

Allowed countervalue difference

The following T2S cash tolerances will apply to instructions (against payment instructions in EUR only):

  • EUR 2 for transactions with an amount equal to or less than EUR 100,000; and
  • EUR 25 for transactions with an amount greater than EUR 100,000.

In the event of a discrepancy within the limits, in principle the cash amount of the delivering party will prevail.

Back-to-back processing (Transaction Linking)

Back-to-back processing is available for transactions in NASDAQ CSD-eligible securities.

Cancellation

  • Unmatched instructions can be cancelled unilaterally, at any time, by the party who placed the instruction or until cancelled by T2S.
  • Matched instructions must be cancelled bilaterally by both counterparties.

Recycling rules

  • Unmatched instructions will be recycled for 20 business days (starting from the initial settlement date), after which they will be cancelled.
  • Unmatched cancellation requests will be recycled for 20 business days (starting from the date of receipt).
  • Matched instructions will have no cancellation limit and will be recycled until a business rule is violated (for example, security reaches maturity).

Penalties/Buy-ins

In cases of delay of settlement date (SD), a service fee is applied at Nasdaq Baltic exchange. The service fee for the postponement of the SD due to the default of the transaction consists of a fixed proceeding fee (EUR 70) and an added percentage (0.1%) of the transaction value for each trading (business) day with a maximum up to EUR 500. The proceeding fee is a one-off fee but the added percentage is applicable for each trading day by which the actual SD of the transaction differs from the initial SD (=Value Date) of the transaction. Any related service fees applied on any customer late transactions will be debited to the impacted customer as out of pocket fees.

Buy-ins occur in extraordinary cases.

A buy-in of securities will be initiated if the stock exchange member firm, which is a seller according to the trade data of the exchange transaction, does not have sufficient securities to fulfil the transaction.

New issues settlement

Customers interested in the service for new issues of Nasdaq CSD government bonds should contact Clearstream Banking Customer Service or their Relationship Officer.

Specific settlement rules / settlement restrictions

For stock exchange trades, provision must be available by 18:00 on SD-1 for securities and by 11:00 on SD for cash.

All trades are settled under the same rule and change of ownership is done on settlement date. There is no automatic trade matching.