Market Link Guide - U.S.A.

30.06.2020

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, Article 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 payment

Yes

Eligible settlement currency: U.S. Dollars (USD).

Settlement against payment in central bank money account of CBL/CBL customers

No

CBL holds a cash account at the custodian. Against payment settlement takes place on Citibank NA’s cash account at the local central bank.

Bridge settlement

Yes

See "Settlement restrictions applying to US customers" in "specific settlement rules/settlement restrictions" under Settlement services.
Shaping facility

No

 
Partial settlement

No

 
Settlement penalty fees

Yes

 
Pre-matching

Yes

 
Back-to-back processing

Yes

 
Allegements

Yes

 
Automatic compensation

Yes

For against payment transactions only.

Registered securities

Yes

 
Multi Market Securities

Yes

 
Lending and borrowing

Yes

Debt securities only.

Proxy voting

Yes

 
Investment Funds

Yes

Certain open-end mutual funds, and DTC-eligible closed-end mutual funds

Liquidity Hub Connect

No

 
Sale and purchase of rights

Yes

 
Repo services

No

 
Market restrictions

Yes

See under Bridge settlement.

FTT

No

 
Daily reconciliation

Yes

 
Miscellaneous

Yes

Safekeeping of US restricted securities - Securities Payment Order (SPOs).

Moment of entry

FED: The FED rules do not define the moment of entry within the meaning of the Settlement Finality Directive.

DTC: The DTC rules do not define the moment of entry within the meaning of the Settlement Finality Directive.

Irrevocability

FED: Settled transactions are irrevocable, subject to exceptions as described below under settlement finality.

DTC: Settled transactions are irrevocable, subject to exceptions as described below under settlement finality. For information on the matching services at the DTC, please refer to the Settlement Services section of the Market Profile.

Settlement finality

FED: Delivery of securities or cash settling via FED 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.

DTC: 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.

For information on the receiving party’s right to reverse (referred to as the "Don't Know" - DK procedure), please refer to the Settlement Services section of the Market Profile.

Legal arrangements

The below section is based on the legal opinion obtained by CBL that was issued on 18 February 2020. 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.