Finland: Launch of new system – impact on customers

22.12.2017

Further Announcement A16098, dated 5 July 2016, and Marketflashes  M16013, dated 12 September 2017 and M17001, dated 12 January 2017, Clearstream Banking1 would like to advise customers that, effective

12 February 2018

Euroclear Finland’s core Central Securities Depository (CSD) platform HEXClear and Central Register will be replaced by the Infinity system. The effective date was agreed with the Finnish Market Advisory Committee (MAC).

This launch by Euroclear Finland, impacts equities and corporate bonds and is referred to in the market as Release 2. Release 1 that impacted bonds and money market instruments was launched in February 2015, however there were no new requirements for customers at the time. With the launch of Release 2, all Euroclear Finland eligible securities held via CBL will be impacted as detailed in this announcement.

New settlement times

Euroclear Finland will introduce new settlement deadlines for equities and bonds and therefore the customer deadlines will be improved as follows:

Note: All times are Central European Time (CET).

The deadlines shown below are valid provided that your instructions are complete, accurate and eligible for straight-through processing (STP) in Clearstream Banking and in the local market.

You are also reminded that you must ensure that any necessary provision is available and that the counterparty’s instruction is in place.

If either of these criteria is not met, we cannot guarantee timely settlement.

Instruction

Provisioning

Deadline for receipt of valid instruction

Expected settlement results a

start

end

from

to

value

AP=Against payment FOP=Free of payment SD=Settlement date

Equities, bonds and other money market instruments – Infinity a, b

Receipts

FOP

21:00
SD-2

17:45
SD

17:45
SD

09:00
SD

18:00
SD

AP

21:00
SD-2

15:35
SD

15:35
SD

09:00
SD

18:00
SD

SD

Deliveries

FOP

21:00
SD-2

17:45
SD

17:45
SD

09:00
SD

18:00
SD

AP

21:00
SD-2

15:35
SD

15:35
SD

09:00
SD

18:00
SD

SD

Place of settlement

The place of settlement for all securities is APKEFIHHXXX .

Partial settlement

Euroclear Finland will not implement partial settlement in Release 2. If a customer sends  an instruction with the partial settlement indicator this will be sent to Euroclear Finland but it will be ignored and the partial amount will not settle. If a customer would like to partially settle an instruction, the original instruction must be cancelled and a new instruction sent with the required amount.

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 Clearstream Banking, customers may use the following fields:

Type and purpose of the additional matching field

Xact via SWIFT and Xact File Transfer

CreationOnline

Xact web portal

Opt out indicator

Customer wishes to opt out from market claims or transformations

:22F::STCO//NOMC

Opt-out indicator

NOMC- No Automatic Market ClaimC

Cum indicator

Customer wishes to indicate its transaction as cum coupon

:22F::TTCO//CCPN

CUM/EX indicator

CCPN- Cum CouponC

Ex indicator

Customer wishes to indicate its transaction as ex coupon

:22F::TTCO//XCPN

CUM/EX indicator

XCPN- Ex Coupon or

Customers must ensure that their counterparty indicates the same opt-out and cum/ex indicator at instruction level; otherwise, the instructions will not match.

The Opt-out and Cum/Ex indicators are processed by Euroclear Finland for matching.

If the opt out indicator is not populated, no additional matching field has been populated and the instruction is matched then Euroclear Finland will process the market claim and cancel the old instruction and generate the new instruction automatically. The new settlement date is the pay date.

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

Xact web portal

Common reference

Customer wishes to indicate a reference agreed with the counterparty

:20C::COMM

Common Trade Reference

Common ID

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 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

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 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 part

Securities account of the receiving part

These optional matching fields are initially not mandatory and when one counterparty includes a value and the other does not, the instructions will match. If both parties provide a value, this value must be identical in both instructions in order for them to match. If this is not the case, the instruction remains unmatched.

Hold and release

The hold and release feature available in Infinity will be used by Clearstream Banking for pre-matching

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.

If the customer’s counterparty has placed its instruction on hold, we will report status/reason as

follows:

Xact via SWIFT and Xact File Transfer: SETT//PENx PENx//PRCY

CreationOnline: Counterparty Instruction on Hold in CreationOnline.

Allowed countervalue difference

The following cash tolerances are applicable in Infinity :

  • EUR 2 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.

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

Recycling rules

The following recycling rules will apply in Infinity:

  • 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).

Market claims and transformations  

With Infinity Release 2, Euroclear Finland will introduce automatic detection for market claims and transformations for equities in addition to warrants, structured products and funds being already supported.

The market claims and transformations detection period is set at 20 business days after the event record date.

Further information

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


______________________________________________

1. Clearstream Banking refers collectively to 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, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.