Market Link Guide - U.S.A.

17.07.2019

Key features

CSD link as defined under CSDRa

Yes

Type of link

Indirect link via Citibank N.A., New York to:

  • DTC; and
  • Fedwire Securities Services (FED).

a. CSD Regulation (EU) No 909/2014 art. 2 (29)


CSD

Custodian

Name

DTC

Fedwire Securities Services

Citibank N.A., New York

FATCA GIIN

No GIIN required for a U.S. entity.

No GIIN required for a U.S. entity.

LEI

DTC: 549300HBJLRO8YFMI370

FED: Not available

E57ODZWZ7FF32TWEFA76

Country of incorporation

The U.S.A.

The U.S.A.

Account type

Omnibus account

Omnibus account

Legal Account name / holder


Account holder: Citibank, N.A.

Citibank N.A. New York, as the participant in DTC and Fedwire Securities Services, does not hold an individually segregated account for CBL at either CSD.

DTC: Registered in the name CEDE & Co (DTC's nominee company).

FED: Recorded in the name of Citibank (for clients in the books of the Federal Rerserve Bank of New York).

Clearstream Banking S.A.

Operational arrangements

 Yes/NoRemarks
Settlement free of paymentYes  
Settlement against paymentYesEligible settlement currency: U.S. Dollars (USD).
Settlement against payment in central bank money account of CBL/CBL customersNoCBL holds a cash account at the custodian. Against payment settlement takes place on Citibank NA’s cash account at the local central bank.
Bridge settlementYesSee "Settlement restrictions applying to US customers" in "specific settlement rules/settlement restrictions" under Settlement services.
Shaping facilityNo 
Partial settlementNo 
Settlement penalty feesYes 
Pre-matchingYes 
Back-to-back processingYes 
AllegementsYes 
Automatic compensationYesFor against payment transactions only.
Registered securitiesYes 
Multi Market SecuritiesYes 
Lending and borrowingYesDebt securities only.
Proxy votingYes 
Investment FundsYesCertain open-end mutual funds, and DTC-eligible closed-end mutual funds
Liquidity Hub ConnectNo 
Sale and purchase of rightsYes 
Repo servicesNo 
Market restrictionsYesSee under Bridge settlement.
FTTNo 
Daily reconciliationYes 
MiscellaneousYesSafekeeping of US restricted securities - Securities Payment Order (SPOs).
Bilateral cancellationNo 
Settlement finality

Delivery of securities or cash settling via FED and free of payment settlements via DTC (excluding Money Market Instruments) may be reversed by the buyer/recipient. There is no limitation on the reversal timeframe, nonetheless, most securities reversals occur on the same day that the delivery was made.

Settlement is final for all non-DTC ID and DTC ID against payment deliveries and all Money Market Instrument deliveries settling via DTC.

Legal arrangements

The below section is based on the legal opinion obtained by CBL that was issued on 13 January 2019. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.

No insolvency proceedings against the custodian

Confirmed

Custodian’s liability for negligence

The custodian has the power as a national banking association to sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons.

Book-entry regime with in rem rights

CBL will acquire a security entitlement  with respect to a financial asset when the custodian

(a) indicates by book entry that the financial asset has been credited to the Custody Account;

(b) receives the financial asset from CBL or acquires the financial asset for Clearstream and, in either case, accepts it for credit to the Custody Account; or

(c) becomes obligated under other law, regulation or rule to credit the financial asset to the Custody Account.

Recognition of nominee concept

CBL may be recognised as holding the Custody Account in a representative capacity on behalf of its customers. For insolvency and other purposes, naming a securities account in a manner that indicates a representative relationship will generally be prima facie evidence that the account is held in a representative capacity. This presumption would, however, be rebuttable, and interested parties might be required to defend the characterisation and prove the applicable rights and interests of the respective interested parties.

No right of retention to the custodian

The custodian may only acquire a security interest in a security entitlement of CBL if

(a) CBL buys a financial asset through the custodian in a transaction in which CBL is obligated to pay the purchase price to the custodian at the time of the purchase and

(b) the custodian credits the financial asset to the Custody Account before CBL pays the custodian. Custodian’s security interest would secure CBL’s obligation to pay the custodian for the financial asset.

Segregation of assets at the custodian

Except in limited circumstances, with respect to specific assets, the custodian is not required to segregate securities or other financial assets that it holds for its own account from those it holds for entitlement holders.

No right of use

The custodian may grant a security interest in, or otherwise dispose of, a proprietary financial asset when it does not have a sufficient quantity of that financial asset to satisfy all of its entitlement holders in certain specific circumstances.

No upper-tier attachments

Securities intermediaries are not required to identify financial assets in a fungible bulk to specific holdings in a securities account, and article 8 of the Uniform Commercial Code (UCC) does not provide a method to do it, therefore it is not generally possible for upper-tier attachment to occur under article 8 UCC or the law of the State of New York.

Insolvency of the custodian with no impact on CBL's rights 

Under normal circumstances CBL has a pro rata property interest in the case of bankruptcy of the custodian. CBL’s rights and interests with respect to a financial asset should not be affected by the insolvency or other failure of the custodian unless the financial assets of that kind held by the custodian were insufficient to satisfy the interests of entitlement holders.

Shortfall pro-rated among holders

Confirmed

Settlement finality in case of insolvency

Once a person has acquired a security entitlement, for value and without notice of an adverse claim, no adverse claim can be asserted against that person's security entitlement.