Settlement services - Canada

11.06.2021

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

Immediate Release Flag available

Automated through the CDS

On receipt of instruction

Connectivity mediumInstruction format

CreationOnline and Xact Web Portal

Tick to enable the "Immediate Release" option.

Xact via SWIFT and Xact File Transfer

Field :22F::STCO/CEDE/IREL

Note: In order to benefit from the early matching status available in the Canadian market and therefore avoid settlement delays, CBL recommends that customers input instructions on SD-1.

Procedures for domestic counterparties

The details for receipts and deliveries in vary according to whether the securities are eligible in the CDS.

Counterparties must arrange for securities to be received and delivered as follows:

by book-entry from the CDS:


CDS transfer to CUID code a:

RBCT (for Royal Bank of Canada)


Account:

080000630001


Memo line:

/xxxxx b

by book-entry from the DTC to the CDS (Northbound Flips) - against payment:


Deliver to:

DTC 00000901


In favour of:

298301/xxxxx b,c

by book-entry from the DTC to the CDS (Northbound Flips) - free of payment:


Deliver to:

DTC 00005099


Using CUID code:

RBCT (for Royal Bank of Canada)


In favour of:

080000630001/xxxxx b

by book-entry from the CDS to the DTC (Southbound Flips) - against payment:


Receive from:

DTC 00000901


By order of:

298301/xxxxx b,c

by book-entry from the CDS to the DTC (Southbound Flips) - free of payment:


Receive from:

DTC 00006000


Using CUID code:

RBCT (for Royal Bank of Canada)


By order of:

080000630001/xxxxx b

a. CUID = CDS participant number.
b. xxxxx = customer’s 5-digit CBL account number.
c. 298301 = Royal Bank of Canada’s account at DTC 00000901.

Allowed countervalue difference

A maximum difference in countervalue of CAD 50 is allowed in transactions with domestic counterparties in the CDS. A maximum difference in countervalue of USD 25 is allowed in transactions with domestic counterparties in the DTC.

The amount indicated by the CBL customer will always prevail. This means that, in the event of a discrepancy within the tolerance, the cash amount credited or debited to the CBL customer will be the one indicated by the CBL customer.

Specific settlement rules / settlement restrictions

CBL offers settlement, free of and against payment in USD, between Canadian and U.S. counterparties for securities that are eligible in both CDS and DTC, as follows:

  • Settlement free of payment is facilitated through the CDS’s account at the DTC;
  • Settlement against payment in USD is facilitated through RBC’s agent, Bank of New York Mellon (DTC 0000901), at the DTC.

In the settlement of cross-border transactions, Northbound Flips are deliveries of securities to Canada and Southbound Flips are deliveries to the U.S.A.

RBC’s local settlement agent for the U.S. market reserves the right to reject any transactions for which securities are not considered as eligible according to their internal risk policy.

CDS nominal limitation on settlement instructions

The maximum nominal quantity for a debt transaction against payment is 50,000,000 nominal.

RegS/144A CDS-eligible securities

RegS/144A CDS-eligible securities are eligible for settlement in CBL. On an exceptional basis, the beneficial owner may be requested, by the CDS and/or the issuer, to provide additional documentation for a transfer. This may result in additional out of pocket expenses for CBL customers and settlement delays.

Back-to-back processing

Back-to-back processing is available for transactions in all book-entry securities eligible in the Canadian and U.S. domestic markets. Customers can increase same-day turnaround of instructions by “linking” one domestic receipt to one domestic delivery sale with the same value date.

Note: The linking of transactions does not guarantee settlement. CBL will bear no responsibility with regard to the failure of a linked transaction. By sending a back-to-back instruction in the Canadian market, the customer is deemed to indemnify CBL from any costs, penalties or loss that may be incurred with regard to such instruction.

The service will be performed on a one-to-one basis, provisioning one domestic sale directly with securities from one domestic purchase. Same-day settlement of both instructions will be achieved provided that both the CBL customer and the domestic counterparty meet their settlement obligations and fulfil the market back-to-back requirements within the relevant deadlines.

Note: The deadlines for the receipt of valid instructions are the same as the standard deadlines.

To benefit from this functionality, customers must ensure that their back-to-back transactions are formatted as follows, according to the connectivity medium used:

Connectivity mediumPool ID formatField(s) to be used

CreationOnline

16x 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 ’//’.

Note: The narrative field must be left blank.

Management of failed instructions

Deliveries and receipts with counterparties in CDS

Receipt and delivery instructions remain in suspense until they settle or until they are cancelled. CBL reserves the right to cancel an instruction with a domestic counterparty that has not settled by the 10th domestic business day after the day on which the instruction was released to the depository for settlement.

Deliveries from DTC (Northbound Flips)

Receipt instructions remain in suspense until they settle or until they are cancelled. CBL reserves the right to cancel an instruction with a domestic counterparty that has not settled by the 30th domestic business day after the day on which the instruction was released to the depository for settlement.

Deliveries to DTC (Southbound Flips)

Delivery instructions remain in suspense until they settle or until they are cancelled. If an instruction settles but is then returned (DK) by the counterparty, CBL will reverse the transaction in the customer’s account. The customer that wants to settle such a delivery must therefore re-instruct it.

Treasury shares and Electronic Treasury Orders

Treasury shares are shares that are bought back by the issuing company, reducing the amount of outstanding shares on the market. When shares are repurchased, they may be either cancelled or re-issued. When they are not cancelled, they are referred to as treasury shares.

Treasury shares entail no voting rights and pay no dividends while they remain with the issuer. Once delivered to a buyer, they become fully paid as "normal" shares.

Electronic Treasury Order (ETO) instructions

An Electronic Treasury Order (ETO) is the means whereby treasury shares are purchased directly from the issuer. Customers who want to receive treasury shares in their CBL account following an ETO must communicate "Electronic Treasury Order" in the narrative field of their receipt instruction.

CBL will block the securities in the customer account until the registration is completed.

There are two types of ETO:

  • ETO regular deposit and withdrawal; and
  • ETO instant deposit and withdrawal (processed slightly more quickly than an ETO regular deposit).

The customer must instruct CBL within the following deadlines and include information in the narrative field of their settlement instruction (field :70E:: in SWIFT, field "Settlement Processing Narrative" in CreationOnline) as indicated:

Type of depositNarrativeDeadline

ETO regular deposit or withdrawal

ETO regular deposit or ETO regular return including complete registration details

18:00 CET

ETO instant deposit or withdrawal

ETO instant deposit or ETO instant return including complete registration details

15:00 CET

Note: In the Canadian market, a withdrawal of securities is typically referred to as a “return”.

If only "ETO" is entered, the regular instruction option will apply by default.

There is no set process in place regarding the agent fees and fees may vary depending on the agent. The fees charged to CBL will be passed on to the customer.

Special Settlement Procedure for Telus Corporation

Telus Corporation is a federally regulated company under the Telecommunications Act. Its common shares are subject to foreign ownership restrictions whereby a maximum of 33.3 percent of its outstanding common shares may be held by non-Canadian owners. To be deposited into CDS, common shares held by non-Canadians must be kept segregated from the regular common shares held by Canadians.

ISIN CA87971M1032 is the “trading line”

ISIN CA87971M9969 is the “control line”

To meet the above requirements, a segregated ISIN (ISIN CA87971M9969 - Telus Corporation Non Canadian Common Shares) has been set up both in the Computershare system and in CDS.

Trade settlement involving a non-Canadian customer, as either buyer or seller, must be processed under the regular Canadian common share ISIN CA87971M1032 in the domestic market via CDS.

Non-Canadian customers buying Telus Common Shares must provide a copy of a Reservation From (see attachment), which can be obtained, either directly or through the trading broker, from Computershare. In addition, they must complete a declaration form (see attachment). A copy of both documents must be emailed to CBL Customer Service together with the receipt instruction recording the reservation number in the Settlement Processing Narrative.

Non-Canadian customers selling Telus Common Shares must complete the declaration form required for share withdrawal. On this form, the customer must place a tick in “CDS Settlement Declaration” box. The Declaration must be emailed to CBL Customer Service.

Upon settlement of the trade, the shares are to be changed from ISIN CA87971M1032 to ISIN CA87981M9969 by RBC Investor & Treasury Services in order to reflect the holding of a non-Canadian investor at CDS level.

Cancellation request of your Deliver Transaction: Incurred Risks and related Additional Cost

Important to note, market settlement and Telus Conversions are two separate processes. 

The conversion will not be cancelled if a non-resident tries to cancel their trade instruction after the  deliver instructions and the declaration have been sent to RBC. As such cancellation request are not guaranteed at a certain point of time of the conversion process and should be avoided by CBL participants.

To request a cancellation, in addition to sending the deliver settlement cancellation trade  instruction, CBL participant must send a mt599 Att Settlement Frankfurt team to cancel the  conversion instruction, which will be completed on a reasonable effort’s basis. (We strongly recommend contacting your regular CBL Customer service once MT599 has been sent out to CBL to  ensure an immediate action.)

Notification is important in managing cancellation, especially when replacement instructions are being sent, as it will help prevent a duplicate conversion. If the conversion has been submitted to Computershare for processing, it cannot be cancelled.  Depending upon the status of the conversion at Computershare, the conversion may be rejected at an additional cost (Out of Pocket).  If Computershare has already started the conversion process it cannot be rejected.  Upon completion, the shares will need to be converted back to ISIN CA87971M9969 (the non-resident or “control line”).  A new Reservation from and completed declaration will be required. Upon receipt, a regular conversion will be processed.  This will result in two conversions charges against the original deliver trade instruction reference, which will appear on your monthly billing statement.

New issues settlement

For details of the distribution procedure for new issues of Canadian government bonds, customers should contact Clearstream Banking Customer Service or their Relationship Officer.

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1. All certificates that are not depository-eligible are re-registered into RBC’s nominee name, ROYTOR & Co.
2. "Non-Canadian" refers to any registered holder without an address in Canada.