Introduction of OneClearstream Service for French Registered Securities - update
Note: This Announcement, originally published on 17 September 2018, has been updated to inform customers of important operational updates to technical specifications.
18 February 2019
Clearstream Banking1 will enhance its OneClearstream services to the French Market for all T2S eligible securities via its link through CBF.
The following security types are in scope of the migration.
Essentially registered securities - “Valeurs Essentiellement Nominatives” (VEN)
For these securities, registration with the issuer is mandatory. VEN securities are by default registered in the name of CBF (except for French Residents or specified otherwise by the counterparties). The registration activity is decoupled from settlement, but must occur in close proximity. If this is not respected, penalty fees will be levied by the market2.
Note: Three French Essentially Registered Securities are already CBF-T2S eligible (ISIN FR0000121261 Michelin S.A, ISIN FR0000130213 Lagardère S.C.A and ISIN FR0010040865 Gecina S.A).
Occasionally registered securities - “Valeurs Occasionnellement Nominatives” (VON)3 subject or not to Loyalty Bonus shares (LBS) program
- These securities can exist in bearer or registered form. The bearer form can be settled whereas in registered form, it is excluded from any settlement activity, except when a portfolio transfer occurs without a change of beneficial owner;
- Registration is optional and at the discretion of the customer. Registration must be done in the name of the Final Beneficial Owner (BO).
Loyalty Bonus shares (LBS) – “Prime de fidélité” (PF)
- These securities are a subcategory of VON securities. They give the right to a loyalty bonus if the temporary LBS (PF) are held by the BO for a pre-defined amount of time (typically 2 years, sometimes 4 years);
- In order to qualify for a loyalty bonus programme, the securities must be registered in the name of the BO;
- The temporary LBS and LBS ISINs cannot be settled. In order to sell them, they must first be converted into VON registered securities and then converted to bearer securities (2-step process). Any right to a loyalty bonus will be lost during this process.
Due to specific handling of French registered securities on the French market, Clearstream will adapt its service accordingly for VEN, VON and LBS. Clearstream will also handle the registration process with Euroclear France (issuance of BRN – “Bordereau de Référence Nominative).
This forms part of our ongoing efforts to harmonise our services allowing customers to benefit from advantages across multiple areas of our business.
|New services for VON (Conversion from bearer to registered form and vice versa)||Yes||Yes|
|New services for LBS||Already available||Yes|
|Simplified declaration of beneficial owner (BO) details||Yes via MT54x or MT565, Xact Web Portal and CreationOnline||Yes, via Xact Web Portal settlement or corporate action instruction and MT599a|
|Direct access to T2S counterparties via one cross-border settlement instruction (VEN)||Already available||Yes|
|One single counterparty format procedure for all T2S eligible French securities (single SSI)||Yes||Yes|
a. The REGI option to declare BO details will only be available in CASCADE settlement instructions from H2 2019.
The following areas may be impacted:
- Reference data;
- Customer account structure;
- Settlement instruction formats and customer reporting;
- Asset servicing: Processing and reporting;
- Tax services;
For further information, please refer to the OneClearstream Service offering documents attached below.
T2S French registered securities currently held in CBL will be eligible for settlement in CBF-T2S with the Collective Safe Custody (CSC) status and will become part of the OneClearstream service.
The list of impacted securities is attached below.
Further details for the migration will be published in due course.
The actual migration of the securities to the Investor-CSD solution is subject to a formal Board decision. Any change to the intended timeline or the list of impacted securities will be communicated to Clearstream Banking customers in due course.
Note: This is the current situation based on latest information, should there be any changes or additional information we will inform you accordingly.
For further information, please refer to the updated Market Link Guide on the Clearstream website that will be published on the effective date of the new service.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B-9248, and 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.
2. A temporary penalty fee waiver will be applied.
3. VON in bearer form are not impacted by the changes in this Announcement.