T2S wave 4: Impact on Clearstream Banking services – cutover details - update 1

31.01.2017

Note: This announcement was originally published on 10 January 2017, and has been updated as follows:

  • Austria - Information added about settlement instructions
  • Germany - updated cutover deadline, addition of information about excluded instructions and information about matching

Effective

Monday 6 February 2017

the fourth wave of TARGET2-Securities (T2S) will be launched.

For Austria (OeKB), Germany (CBF), Hungary (KELER), Luxembourg (LuxCSD), Slovak Republic (CDCP) and Slovenia (KDD), please find below the cutover details for the handling of pending transactions for Clearstream Banking1 customers.

Please refer to Announcement A16119, dated 23 November 2016 for instruction specifications.

Austria

Matched and unmatched instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later released to OeKB

All T2S eligible transactions that are in matched or unmatched status and that have been released to OeKB by 15:45 CET on Friday 3 February 2017 will be migrated to T2S by OeKB.

No action is required from Clearstream Banking customers.

Pending instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later not released to OeKB

Pending T2S eligible transactions in an unmatched status, but not yet released to Erste Group Bank AG by 15:00 CET on Friday 3 February 2017, will be stored by CBL and released to Erste Group Bank AG and subsequently to T2S only after confirmation of the successful migration of OeKB to T2S.

Customers must instruct all T2S eligible instructions in the correct format to avoid settlement delays.

The transactions may subsequently remain unmatched, matched or be settled or rejected. Customers will be informed of the status upon receipt from Erste Group Bank AG.

Settlement cut off time

In order to facilitate the start of the migration process on 3 February 2017, OeKB has shortened the end of day cut off deadline. Clearstream Banking customer deadlines on Friday 3 February 2017 are as follows:

Against payment in EUR: 14:55 CET instead of 15:35 CET.

Free of payment: 14:55 CET instead of 17:35 CET.

Note: Settlement deadlines against payment in foreign currencies (CHF, GBP, USD) remain unchanged and are as follows:

Against payment: 13:55 SD-1.

Settlement instructions

We remind customers, that in T2S, OeKB participants are identified exclusively by the combination of the BIC11 of the home CSD (SWIFT :95P::PSET; CreationOnline Place of Settlement; Xact Web Portal Depository) and the BIC11 of the OeKB participant. The use of the Data Source Scheme (DSS) will no longer be accepted to identify the counterparty in T2S.

Income and custody events

Market claims and Transformations

For any income payments or corporate action events with Record Date before, on or after 3 February 2017, payments will be booked and executed on Pay Date.

Any matched and entitled, but not yet settled instruction, will be migrated to T2S by Erste Group Bank AG and managed according to the new T2S market claims and transformation rules.

Germany

Matched and unmatched instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later released to CBF

All T2S eligible transactions that are in matched or unmatched status and that have been released to CBF by 18:00 CET on Friday 3 February 2017 will be migrated to T2S by CBF.

No action is required from Clearstream Banking customers.

Pending instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later not released to CBF

Pending T2S eligible transactions in an unmatched status, but not yet released to CBF by 17:40 CET on Friday 3 February 2017, will be stored by CBL and released to CBF and subsequently to T2S only after confirmation of the successful migration of CBF to T2S.

Customers must instruct all T2S eligible instructions in the correct format to avoid settlement delays.

The transactions may subsequently remain unmatched, matched or be settled or rejected. Customers will be informed of the status upon receipt from CBF.

Instructions excluded from migration to T2S by CBF

Pending cross-border instructions cannot be automatically transferred to T2S and will be cancelled by CBF on Friday 3 February after 15:30.

Against payment instructions with Intended Settlement Date (ISD) prior to 22 December 2016 or any Free of Payment instruction with ISD prior to 11 November 2016, will be rejected by T2S and not be migrated by CBF.

Customer instructions with values in the new matching fields (Opt-out or Cum/Ex indicators) might not match with the instruction of the counterparty if the values deviate.

Customers must send new instructions in the correct format and with a valid Settlement Date after confirmation of the successful migration of CBF to T2S.

Settlement cut off time

There is no change to the current Clearstream Banking settlement deadlines for CBF eligible securities on Friday 3 February 2017 and they remain as follows:

Against payment in EUR: 15:40 CET

Free of payment: 17:40 CET

Note: Settlement deadlines against payment in foreign currencies (CHF, GBP, USD) remain unchanged and are as follows:

Against payment: 17:10 SD.

Reminder: Customers are reminded to use only BIC 11 DAKVDEFFXXX to identify CBF as Place of Settlement in T2S and not DAKVDEFFDOM, which is not a valid T2S Party BIC11 of CBF in T2S. Otherwise, Clearstream Banking customer instructions will be rejected by T2S.

Matching

Clearstream Banking strongly recommends that customers  agree with the counterparty in CBF about how the second level matching field should be instructed to avoid matching issues post migration.

The CBF counterparty should always instruct against CBL’s BIC (CEDELULLXXX) in the first level matching field (DEAG/REAG) and against the CBL customer BIC in the second level matching field (BUYR/SELL). In case the Data Source Scheme (DSS) is used to identify the counterparty in the Buyer/Seller field, then both counterparties, CBF and CBL customers must use the DSS scheme (95R) in the second level matching field. Otherwise, instructions will not match.

Income and custody events

Market claims and Transformations

For instructions resulting out of a corporate action event (Corporate Actions on flow and stock) with a record date prior to 3 February 2017, CBF will cancel all instructions that are pending on 3 February close of business.

Clearstream customers are requested to liaise with their counterparty to compensate the proceeds of market claims or transformations bilaterally or to instruct the claim as of Monday 6 February 2017.

For instructions resulting out of a non-income event (corporate actions on flow and stock) with a record date equal or after 3 February 2017, market claims and transformations will be generated with the new T2S rules with payment date 6 February 2017 or later.

Hungary

KELER will migrate to T2S during the migration weekend, but will implement its replacement system (BaNCS) including all T2S functionalities only after migration has taken place. According to current plans, the go-live of the new system will be 3 July 2017.

Impact on customers

Settlement against EUR is not offered by Clearstream to customers today. All FoP instructions will settle via KELER as today, but outside T2S, with the exception of cross-border deliveries to OeKB counterparties.

Hence customers are not impacted by the migration of KELER to T2S and domestic Hungarian instructions will settle without any change.

Luxembourg (LuxCSD)

Matched and unmatched instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later released to LuxCSD

All T2S eligible transactions that are in matched or unmatched status and that have been released to LuxCSD by 16:00 CET on Friday 3 February 2017 will not be migrated to T2S by LuxCSD.

Such instructions will be cancelled by LuxCSD and customers are requested to re-instruct in the correct T2S format after successful migration of LuxCSD has taken place.

Pending instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later not released to LuxCSD

Pending T2S eligible transactions in an unmatched status, but not yet released to LuxCSD CET on Friday 3 February 2017, will be stored by CBL and released to LuxCSD and subsequently to T2S only after confirmation of the successful migration of LuxCSD to T2S.

Customers must instruct all T2S eligible instructions in the correct format to avoid settlement delays.

The transactions may subsequently remain unmatched, matched or be settled or rejected. Customers will be informed of the status upon receipt from LuxCSD.

Settlement cut off time

In order to facilitate the start of the migration process on 3 February 2017, LuxCSD has shortened the end of day cut off deadline. Clearstream Banking customer deadlines on 3 February 2017 are as follows:

Against payment in EUR: 15:45 CET (no change)

Free of payment: 15:55 CET instead of 20:00 CET.

Income and custody events

There is no impact on income events (interest or dividend) on LuxCSD-eligible securities. Furthermore, no impact is expected on corporate action events over the migration weekend.

Slovak Republic

Matched and unmatched instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later released to CDCP

All T2S eligible transactions that are in matched status and that have been released to CDCP by 13:00 CET on Friday 3 February 2017 will be migrated to T2S by CDCP.

Unmatched instructions will not be migrated to T2S, but will be cancelled by Clearstream at close of business on Friday after 12:45. Customers are requested to re-instruct in the correct T2S format after successful migration of CDCP has taken place.

Pending instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later not released to CDCP

Pending T2S eligible transactions in an unmatched status, but not yet released to CSOB by 12:45 CET on Friday 3 February 2017, will be stored by CBL and released to CSOB and subsequently to T2S only after confirmation of the successful migration of CDCP to T2S.

Customers must instruct all T2S eligible instructions in the correct format to avoid settlement delays.

The transactions may subsequently remain unmatched, matched or be settled or rejected. Customers will be informed of the status upon receipt from CSOB.

Settlement cut off time

In order to facilitate the start of the migration process on 3 February 2017, CDCP has shortened the end of day cut off deadline. Clearstream Banking customer deadlines on 3 February 2017 are as follows:

Against payment in EUR: 12:40 CET instead of 14:25 CET

Free of payment: 12:40 CET instead of 15:55 CET

Income and custody events

There is no impact on income events (interest or dividend) on CDCP eligible securities. Furthermore, no impact is expected on corporate action events over the migration weekend.

Slovenia

Matched and unmatched instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later released to KDD

All pending T2S eligible transactions that are in matched or unmatched status and that have been released to KDD by 16:15 CET on Friday 3 February 2017 will be removed by NLB from the KDD system and will be submitted again to KDD after successful migration has taken place.

No action is required from Clearstream Banking customers.

Pending instructions with requested settlement date (SD) up to and including 3 February 2017 and SD 6 February 2017 or later not released to KDD

Pending T2S eligible transactions in an unmatched status, but not yet released to NLB by 15:45 CET on Friday 3 February 2017, will be stored by CBL and released to NLB and subsequently to T2S only after confirmation of the successful migration of KDD to T2S.

Customers must instruct all T2S eligible instructions in the correct format to avoid settlement delays

The transactions may subsequently remain unmatched, matched or be settled or rejected. Customers will be informed of the status upon receipt from NLB.

Settlement cut off time

In order to facilitate the start of the migration process on 3 February 2017, KDD has shortened the end of day cut off deadline. Clearstream Banking customer deadlines on 3 February 2017 are as follows:

Against payment in EUR: 15:35 CET (no change).

Free of payment: 15:40 CET instead of 16:55 CET.

Income and custody events

There is no impact on income events (interest or dividend) on KDD eligible securities. Furthermore, no impact is expected on corporate events over the migration weekend.

Matching note: Post migration, Clearstream Banking customers are recommended to use the additional matching fields opt-out and cum/ex indicators only if it is ensured that their counterparty indicates the same opt-out and cum/ex indicator at instruction level. Otherwise, the instructions will not match. If no agreement with the counterparty is in place on the usage of the opt-out and cum/ex indicators, we recommend that they are left blank in order to avoid matching issues.

Further information

For further information, customers may contact Client Services or their Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.