Settlement services - Germany

09.10.2017

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.

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 offeredMethod employedStart (local time)
All securities
CBF and LuxCSDThe T2S hold and 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 or LuxCSD instruction can be changed via a modification (MT530) until its final settlement. In parallel to the instruction hold flag set by the CBF or LuxCSD customers (“Party hold”) , T2S provides hold information from the counterparty (“counterparty hold”) itself. The following values can be reported to CBF or LuxCSD customers:
•    “CSDH” for CSD hold
•    “PREA” for Party hold
•    “RRCY” for Counterparty hold
Automated through T2SOn receipt of instructions
CBLCBL 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 released to CBF, it cannot be put back "on hold" again.Automated through T2SOn 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

If the Opt-out indicator is set to NOMC, the transaction will be excluded from any market claim process. Reverse market claims will be processed regardless if the underlying event is income or non-income.The CCPN CUM/EX flag is ignored by CBF's claim processes meaning that market claims will not be generated even if the flag is set.

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.

Allegements

All securities
CBFReceipt 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 a 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.
CBLCBL 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.
LuxCSDIf a settlement instruction does not match after the first matching attempt, the counterparty is informed via 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:

CSDBIC11
CBF via T2SDAKVDEFFXXX

Identification of the counterparty in T2S

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

Counterparty identificationT2S SAC
CBF and LuxCSDThe 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.SAC of the CSD participant
CBLIf 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.DAKV7201000

Procedures for domestic counterparties

Securities eligible in CBF

Procedure for the domestic counterparty

Deadline

Receipt in CBF/Delivery from CBF

CBF

Deliver to/Receive from: BIC DAKVDEFFXXX

(T2S SAC number DAKVXXXXXXX)a

In favour of/By order of: CBF Customer BIC11 and account number of the Clearstream customer

17:55

Receipt in CBL/Delivery from CBL

CBL

Deliver to/Receive from: BIC DAKVDEFFXXX

(T2S SAC number DAKV7201000)a

In favour of/By order of: CBL BIC11 (CEDELULLXXX) and BIC11 or account number of the Clearstream customer

17:55

Receipt in LuxCSD/Delivery from LuxCSD

LuxCSD

Deliver to/Receive from: BIC LUXCLULLXXX

(T2S SAC number DAKV7454000)a

In favour of/By order of: LuxCSD Customer BIC11 and account number of the LuxCSD customer

17:55

a. The securities account number (SAC) is an optional matching criteria in T2S.

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 15:45 CET.

Within these windows all transactions that are pending due to lack of securities or cash 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 or cash. 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.

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 flag (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.

Bridge settlement

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

Back-to-back processing (Transaction Linking)

Back-to-back processing is available for transactions in CBF-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 CBF government bonds should contact Clearstream Banking Customer Service or their Relationship Officer.

Physical delivery of securities that will be redenominated

For the physical delivery of securities that will be redenominated, customers must submit their delivery instructions seven business days before the date of redenomination.

Physical deposit of securities that will be redenominated

For the physical deposit of securities that will be redenominated, customers must ensure that the securities are received at CBF eight business days before the date of redenomination.