Settlement services - Portugal

15.12.2017

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.

Service offeredMethod employedStart (local time)
All securities
Release of pre-matching instructions (limited to outside the provisioning period) followed by a settlement instructionAutomated through T2SOn receipt of instructions

Hold and release

Interbolsa has the T2S Hold and Release service in place. Clearstream has this feature in place for the pre-matching service only. Therefore, once the customer's instruction is provisioned and released to the market, it will no longer be possible to place the instruction on hold.

Allowed countervalue difference

A maximum difference in countervalues of EUR 2 is allowed for transactions with an amount less than or equal to EUR 100,000 and EUR 25 for transactions with an amount greater than EUR 100,000.

Matching service

Matching of instructions with counterparties in Interbolsa will take place in T2S.

Interbolsa applies the T2S rules for matching. As a consequence, 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:
:22F::STCO//NOMC – Opt out indicator
:22F::TTCO//CCPN – CUM/EX indicator
:22F ::TTCO//XCPN – CUM/EX indicator

Optional matching field

The following optional matching fields must match when provided by both counterparties:
:20C::COMM - Common Trade Reference
:95a::SELL - Client of delivering CSD participant
:95a::BUYR - Client of receiving CSD participant
:97A::SAFE with :95a::DEAG - Securities account of the delivering party
:97A::SAFE with :95a::REAG - Securities account of the receiving party

Customers can use the above optional matching criteria to reduce the risk of cross-matching.

Allegements

Clearstream receives counterparty instructions alleged on its account at Interbolsa. These are reported to customers provided your CBL account is present and a subscription is in place.
The allegements 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.

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 Interbolsa:

CSDBIC11
InterbolsaIBLSPTPPXXX

If a customer uses a BIC8 to identify the Place of Settlement, 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.

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 then be 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 of any kind suffered by CBL as a result of the customer not complying with the above requirement.

Procedures for domestic counterparties

Customers are requested to inform their local counterparties to use the following details for instructions sent via Interbolsa that settle against BNP Paribas Securities Services (as Clearstream's depository) in T2S:

  • BIC11 BP2S: PARBFRPPXXX (T2S SAC number IBLSPARBFRPPXXXSA000000008010000055)a;
  • In favour of/By order of: BIC 11 and account number of the Clearstream customer.

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

Note: If the counterparty is within BP2S, the account 435730D should be mentioned in addition.

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

Partial settlement

T2S will apply partial settlement when the delivering party does not have the full amount of securities or the receiving party does not have sufficient cash on the dedicated cash account (DCA) for 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

Customer's 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.

Customers that do not wish to partially settle their transactions must provide the following field in their instruction:

Connectivitiy mediumValueField(s) to be used
CreationOnlineNoPartial Settlement
Xact via SWIFT and Xact File TransferNPAR:22F::STCO//

Cancellation

T2S will introduce the following cancellation rules which will also be applicable to Clearstream Banking’s link to Interbolsa:

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

Recycling rules

The following recycling rules will apply in T2S and will also be applicable to Clearstream Banking’s link to Interbolsa:

  • 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).

Specific settlement rules / settlement restrictions

Local settlement practices for OTC trades

Market participants have agreed to use the Bank Identification Code (BIC) instead of the name to identify the ordering party (in receipt instructions) or recipient (in delivery instructions) when different from the domestic counterparty. Failure to do so, when such BIC exists, may delay matching of instructions.

N.B.: Clearstream Banking requires that customers include information of change or non-change of beneficial ownership in the appropriate field in all OTC instructions.

Local settlement practices for stock exchange trades

The settlement agent of the Clearing Member is responsible for the settlement of on-exchange trades and, therefore, all allocations to the final client, that is, to Clearstream Banking's account or its customer’s account, will be done via an OTC trade between the settlement agent of the Clearing Member and Clearstream Banking's subcustodian.

Local settlement practices for pledge and repo transactions with Banco de Portugal (BdP)

Customers instructing pledge and repo transactions with BdP should use the following settlement transaction types:

  • REPU for a Repurchase agreement transaction; or
  • COLO for a Collateral transaction

Delivering/Receiving Agent BIC11: BGALPTPLXXX.

BdP also uses the following optional matching criteria that need to be populated by both parties for transactions to match:

  • Opt-out indicator for market claims: NOMC - No Automatic Market Claim; and
  • Partial Settlement indicator: NPAR - Partial not allowed

Further details on market practices in Portugal are available on ECB website

List of eligible securities is available here

Back-to-back processing

Back-to-back processing is available for transactions in all dematerialised securities eligible in this market. 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. To benefit from this functionality, customers must ensure that their back-to-back transactions are formatted as per the following format, depending on the media used.

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 ’/’ nor must it contain two consecutive slashes ’//’.

Management of failed instructions

OTC trades

All delivery and receipt instructions that remain with “unmatched” status 20 business days after the intended settlement date or the date of the last status change, whichever comes later, are automatically cancelled on that day in the T2S and subsequently by BNP Paribas Securities Services (BP2S).

All delivery and receipt instructions can be cancelled under the following conditions:

  • unilaterally: by participants for unmatched instructions or by CSDs or CCPs through a matched settlement instruction;
  • bilaterally: for matched instructions.

New issues settlement

Government bonds

Transactions in new issues settle in real time in T2S on closing date. The cash countervalue for transactions with a requested settlement date on the closing date or the following business day is credited/debited to the customer's account for value settlement date.

Corporate bonds and equities

Transactions in new issues settle in real time in T2S on closing date. The cash countervalue for transactions with a requested settlement date on the closing date is settled in real time on closing date.