Settlement services - France

09.04.2018

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.

The hold and release feature available in T2S will be used by CBL, CBF and LuxCSD for the pre-matching of settlement instructions in T2S.

Service offered

Method employed

Start (local time)

All securities

CBF and LuxCSD

The T2S hold/release process allows for a released transaction to be set back to hold as long as it has not settled. Instructions that were sent on “Hold” can be released via a corresponding MT540 – MT543 “NEWM”. The status of a CBF/LuxCSD instruction can be changed via a modification (MT530) until its final settlement. In parallel to the instruction hold flag set by the CBF/LuxCSD customers (“Party hold”) , T2S provides hold information from the counterparty (“counterparty hold”) itself. Hence, the following values can be reported to CBF/LuxCSD customers:

  • “CSDH” for CSD hold
  • “PREA” for Party hold
  • “RRCY” for Counterparty hold

Automated through T2S

On receipt of instructions

CBL

CBL releases pre-matching instructions (PREA) only outside the provisioning period to CBF for matching purposes only. As soon as the start of the provisioning period is reached and provided the provisioning of cash and securities is successful, the settlement instruction (NEWM) will be released to CBF for further processing and settlement in T2S. Once the instruction is release to CBF, it cannot be set back on hold again.

Automated through T2S

On receipt of instructions

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

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.

Note: Clearstream recommends to agree on the usage of a common reference (:20C::COMM) and the T2S Security Account number (SAC) with the counterparty in Euroclear France. Both fields are “optional” matching criteria in T2S and avoid cross-matching if it is populated in the Settlement instructions of both parties.

Allegements

T2S will send allegement messages depending on the information indicated in the counterparty’s instruction. 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 Clearstream Banking or LuxCSD.

All securities

CBF

If the counterparty of the CBF customer instructs first, an allegement instruction will be generated by T2S. T2S will send the allegement message (sese.028) to CBF or to the DCP, without prior validation, whether the ISIN is eligible in the counterparty CSD, that in this case is CBF.

Receipt domestic instructions are automatically generated if the passive matching flag is set on the receiving main account or sub-account. In addition the generation follows the rules below:

  • For domestic transactions, if the delivering party is an ICP or DCP customer and the recipient is a passive matching participant (ICP/DCP), CBF generates the receipt instruction based on the delivery instruction sent to CBF (ICP) or based on the copy of the DCP instruction (sese.023) received from T2S.
  • For cross-border transactions where the deliverer is a foreign CSD customer and the recipient is a CBF customer (ICP/DCP), the receipt instruction is generated based on the allegement received from T2S.
  • Allegements are not generated for “Already matched” instructions.

CBL

CBL may receive counterparty instructions alleged on its account at CBF 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.

LuxCSD

If a counterparty’s settlement instruction does not match after the first matching attempt,

the customer is informed through an allegement message after a predefined period of time (T2S standard service).

Identification of CSDs in T2S

In T2S all CSDs will be identified by their BIC11. CBL, CBF and LuxCSD customers are required to use the following BIC11 as Place of Settlement for domestic instructions:

CSD

BIC11

Euroclear France via T2S

SICVFRPPXXX

Identification of the counterparty in T2S

In T2S, the CSD participants are identified exclusively by the combination of their home CSD (that is, i.e.PSET DAKVDEFFXXX) and their BIC11.

Counterparty identification

 

CBF

4702000a (counterparty CSD account in CBF) or alternatively SICVFRPPXXX (BIC11 of the counterparty CSD)b. and the T2S Party BIC11 of the CSD participant

The counterparty CSD BIC is used by CBF to address the CSD where the counterparty is set up as T2S Party. This counterparty's CSD is reflected in CASCADE with a counterparty CSD account. The counterparty CSD BIC has to be used in cross-border instructions with T2S In-CSDs. 

 

CBL

Home CSD BIC11 and the T2S Party BIC11 of the CSD participant.

If a CBL 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.

 

LuxCSD

Home CSD BIC11 and the T2S Party BIC11 of the CSD participant

 

a. The counterparty CSD account can only be used in the CBF legacy connectivity BIC11 of other T2S IN-CSDs possible if the technical configuration in T2S is available.

b. BIC11 of other T2S IN-CSDs possible if the technical configuration in T2S is available.

Note: Cross-border settlement between CSDs in T2S is only possible, if the corresponding technical configuration in T2S for cross-border links has been established by the CSDs linked to each other.

Procedures for domestic counterparties 

CBL

 

CBL depository – CBF

CBL depository – BNP Paribas Security Services

Place of settlement

DAKVDEFFXXX

SICVFRPPXXX

Delivering/Receiving Agent

CEDELULLXXX

CEDELULLXXX

SAFEof the DEAG/REAG

Not to be instructed. If instructed, it must be the valid CBL SAC:
Euroclear France: DAKV7201103

Not to be instructed. If instructed, it must be the valid CBL SAC:

Euroclear France:
SICVCEDELULLXXX000L10

Buyer/Seller

BIC11 of the CBL customer

BIC11 of the CBL customer

a. Although the safekeeping account of Party 1 (REAG/DEAG) is an optional matching field in T2S, if it is present on one instruction only it will only match with instructions instructed by this account.
As CBL does not forward its own SAC to the settlement parties, if the customer counterparty instructs the SAFE of REAG/DEAG it must match CBL's SAC in T2S exactly.
We encourage customers to ask their counterparties not to include the SAFE of the DEAG/REAG in their instructions (also called securities account of the delivering/receiving party).

CBF

Place of settlement

DAKVDEFFXXX

Delivering/Receiving Agent

T2S Party BIC11 CBF participant

LuxCSD

Place of settlement

LUXCLULLXXX

Delivering/Receiving Agent

T2S Party BIC11 LuxCSD participant

Settlement of French Investment Funds (OPCVMs)

For transactions in OPCVMs, counterparties are requested to agree on the type of settlement instruction, which can be either normal instruction (règlement livraison) or, in the case of a primary market subscription/redemption trade, an OPCVM instruction (filière RG/SG).

In the latter case, customers are required to instruct as follows:

Connectivity medium

Field(s) and content

CreationOnline

Type of Settlement Transaction:
select “Investment Fund Subscription Settlement” or
“Investment Fund Redemption Settlement”

Xact via SWIFT and Xact File Transfer

For MT54x, customers must input in sequence E:
:22F::SETR//SUBS (for a subscription)
:22F::SETR//REDM (for a redemption)

To avoid failed matching, counterparties in OPCVM subscription and redemption transactions must agree on the instruction format to be used

ODM Domestic transfers via BP2S account 030

  • For “ordre de movement” (ODM) transfers, domestic counterparties that want to deliver or receive securities free of payment into/from CBL’s account in BP2S must always send the respective instruction, as follows:
    Procedure for the domestic counterparty
    Receipt in CBL / Delivery from CBL
    Receive from / Deliver to: BP2S: account number 030 PARBFRPP.
    For the account of (optional): CBL: either BIC CEDELULL or account number 44428N.
    In favour of: Account number in CBL of the final beneficiary or ordering party.
  • The instruction will be executed, in dematerialised form only, by BP2S outside of  ESES.

Partial settlement

In T2S partial settlement for eligible instructions is allowed at the last night-time settlement cycle in sequence ‘X’; and within the real-time settlement period:

  • At 08:00 CET, 10:00 CET, 12:00 CET, 14:00 CET and 14:15 CET.
  • 15 minutes prior to the DvP cut-off time (between 15:45 CET and 16:00 CET).

Within these windows all transactions that are pending due to lack of securities and hold a positive partial settlement indicator are included in the partial settlement processing.

Whether partial settlement will be applied or not depends on the partial settlement indicator set within the instruction or on the customer account setup. A settlement instruction will settle partially if both counterparties instruct with the Field :22F::PARQ.

Partial settlement applies only when full settlement is not possible due to lack of securities. T2S will perform partial settlement according to the available position after analysing the partial settlement indicator in the instruction.  The settlement instructions are submitted to a full settlement attempt before being submitted to a partial settlement attempt (if permitted by instruction indicators and/or customer account setup).

Partial settlement is applicable to domestic and cross-border instructions and is not allowed for PFoD instructions. Also, Partial settlement is not applied if instructions are linked to any other settlement instruction with link type ‘Before’, ‘After’, ‘With’ or via pool reference. Partial settlement is not applied if the transaction undergoes a process where a CoSD Hold is used. The unsettled remaining part of a partially settled settlement instruction can be cancelled.

Partial Settlement

CBF

CBF customers can define within the instruction whether partial settlement is to be applied or not by setting a partial settlement indicator. In addition, they can set a flag on account level (CBF 7-digit account number) that defines the default value to be set to those instructions where the partial settlement indicator is not filled. The flag is maintained within CBF’s static account database and defines which partial settlement indicator is to be assigned to an instruction as default value (NPAR, PART).The flag applies to delivery and receipt instructions.

CBL

Customers’ delivery and receipt instructions will continue to be provisioned for the full quantity and/or cash value before being released for settlement. Consequently, customer’s delivery and receipt instructions may only settle partially if their counterparty is short of securities or cash and the instructions are received by T2S within the times set above.
When CBL customers access T2S via CBF, the default set up will be Partial Settlement. Customers that do not wish their transactions to settle partially must provide the No Partial Settlement indicator (NPAR) in their instruction.

LuxCSD

LuxCSD customers can define within the instruction whether partial settlement is to be applied or not by setting a partial settlement indicator.

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.

For non-EUR currencies, the T2S cash tolerances apply to against payment instructions in foreign currencies between CBL and CBF participants (not applicable to LuxCSD).

Bridge settlement (CBL only)

CBL customers can settle Euroclear France T2S- eligible securities via the Bridge. This service is not available for CBF and LuxCSD customers.

Back-to-back processing (Transaction Linking)

Back-to-back processing is available for transactions in French T2S 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).

New issues settlement

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

ODM transfers

The few securities that are not eligible for settlement in EF can be transferred in the market via “ordre de movement” (ODM). ODM transfers are routed through the registrar of the security, that registers the name and address of the final beneficiary and the name of the custodian of the security.

Customers are requested to indicate in their instructions whether the ODM transfer is to be executed with or without change of final beneficiary. If there is a change of final beneficiary, customers must provide, in the instruction narrative, details to identify the final beneficiary. The ODM settlement process can take up to three weeks.

Representative certificates

Representative certificates are issued to allow French dual-market shares to be traded on other markets where the securities still exist in physical form. The format requested to execute settlement is included in the section of the transaction specification. In the case of incomplete instructions, CBL will act on a “best efforts” basis.