Update on T2S Wave 1 implementation

12.06.2015

Clearstream Banking informs customers about upcoming changes related to T2S Wave 1 as of

Monday, 22 June 2015

Migration of settlement

Clearstream Banking Frankfurt (CBF) would like to inform its customers that the cross-border link with Monte Titoli for Italian securities will not be modified on 22 June 2015. Based on the result of the T2S CSD Steering Group as of 11 June 2015 which has yet to be confirmed by the ECB Governing Council, Monte Titoli will migrate to the settlement platform T2S on 31 August 2015 instead of 22 June 2015.

Until Monte Titoli migrates to T2S, the current cross-border link to Monte Titoli will remain. Therefore CBF customers must send their instructions to CBF in the current format and with the same currently agreed contents. This means cross-border instructions with the Italian market will be further transmitted to Monte Titoli for settlement as “Free of Payment without match duty” (“FoP Dump”).

In December 2014 CBF announced changes that were based on the existing implementation guidelines from Monte Titoli. These changes will not be applied until Monte Titoli migrates to T2S.

When Monte Titoli migrates to T2S, the following functional and organisational measures for cross-border instructions with the Italian market are planned to be implemented:

  • Change of account number for Monte Titoli;
  • Change of settlement timeline for correctly routed orders;
  • Use of CASCADE order type AA01 and AA02 for Free of Payment (FoP) instructions;
  • Use of BIC11 party notifications;
  • Inclusion of other T2S matching criteria;
  • Adjustment to the cancellation process for correctly routed orders;
  • Forwarding of rejections from Monte Titoli and T2S;
  • Use of reservation entries in favour of the CASCADE sub-account /995;
  • Adjustment of settlement notifications in ISO 15022 format;
  • Processing of corporate actions.

Independent of the adapted approach for Monte Titoli, all other CSDs of T2S Wave 1 – Bank of Greece Securities Settlement System (Greece), Depozitarul Central (Romania), Malta Stock Exchange (Malta) and SIX SIS (Switzerland) – will migrate their settlement to T2S according to schedule and the agreed scope on 22 June 2015.

Customer simulation for the migration of Monte Titoli to T2S

For the future instruction management with Monte Titoli on T2S, CBF intends to set up a simulation phase for its customers. The necessary preparatory details, that is whether and how long customer simulation will be possible, are being assessed. CBF will inform its customers in due course. The currently published Simulation Notification will be updated with latest information.

Activation of T2S Party BICs

With the migration to T2S a unique T2S Party BIC for each CBF account master must be stored for the new settlement processes in T2S. According to the requirements of Monte Titoli this T2S Party BIC will already be necessary for the settlement of cross-border instructions with the Italian market starting with its migration to T2S.

CBF has finalised the activation of T2S Party BICs for T2S Wave 1 on 11 June 2015. The currently implemented adaptations of the account master data remain valid. Monte Titoli’s changed migration date does therefore not have an impact on the entry of counterparty information in OTC instructions.

CBF customers who want to participate in cross-border business with the Italian market, and whose T2S Party BIC has not yet been activated, can participate on the next activation date of T2S party BICs on 8 August 2015. These customers are asked to send their BIC11 forms to the T2S Customer Readiness Team by mid July 2015 latest.