Settlement services - Philippines

16.10.2019

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.

In the event of a mismatch, customers will be informed by 09:30 SD local time. Please note, that if there is a mismatch in the market, no amendment to the instruction is allowed. You must first cancel the instruction and submit a related new instruction by 10:00 SD local time.

Service offeredMethod employedStart
(local time)
Government bonds
Immediate Release Flag availableManual via telephone09:00 SD
Corporate bonds
Immediate Release Flag availableManual via telephone09:00 SD-1
Listed equities
Immediate Release Flag availableManual via telephone09:00 SD-1
Connectivity mediumInstruction format
CreationOnline and Xact Web PortalTick to enable the "Immediate Release" option
Xact via SWIFT and Xact File TransferField :22F::STCO/CEDE/IREL

Procedures for domestic counterparties

Procedure for the domestic counterpartyDeadline
Receipt in CBL

Customers must request their domestic counterparty to deliver the securities to CBL sub-account with SCB as follows:

  • Deliver to: SCB (BIC: SCBLPHMM).
  • For account of: CBL (BIC: CEDELULL).
  • In favour of: Name and account number of CBL customer.
Market deadline
Delivery from CBL

Customers must request their domestic counterparty to receive the securities from CBL sub-account with SCB as follows:

  • Receive from: SCB (BIC: SCBLPHMM).
  • From account of: CBL (BIC: CEDELULL).
  • By order of: Name and account number of CBL customer.
Market deadline

Receipt of securities

For a free of payment delivery to CBL, a valid receipt instruction must be submitted by the customer.

For receipt of securities, free of or against payment, only securities with a valid Bangko Sentral Registration Document (BSRD) will be accepted in order to ensure repatriation of proceeds at a later stage. CBL will not accept securities that do not have a valid BSRD.

The depository will obtain the BSRD on behalf of CBL's omnibus account and register the receipt of securities with the BSP.

Allowed countervalue difference

There are no trade tolerance rules in the Philippines. Countervalue differences are not allowed.

Specific settlement rules / settlement restrictions

Payments and Funds Transfers

Payment and funds transfer instructions must be processed via Real Time Gross Settlement (RTGS) in the Philippines Payments and Settlements System (PhilPass). This ensures that there is real-time and immediate settlement of payments. Managers’ Cheques are not accepted by Clearstream as a form of payment.

In order for such instructions to be processed on an RTGS basis, customers must indicate REC/RTGS in field :72: of the SWIFT instruction MT202) and the BIC of the beneficiary bank in field :58D: of the same instruction.

Field tagField nameContent/Options
:58D:Beneficiary InstitutionBIC of Beneficiary Institution
:72:Sender to Receiver InformationREC/RTGS

For further information about the instruction formatting of MT202 - General financial institution transfer, please refer to the Creation via SWIFT User Guide.

Considering the local requirements, customers must, in the case of transfer from a third party bank, ensure that their MT210 pre-advice is in place and funds have actually been credited to the Clearstream CCB account by SD-1, 14:30 PHT for settlement on SD. Should the funds not have been credited by that time, settlement cannot be guaranteed.

Customers should note that due to the settlement complexity of this market, the withdrawal of funds (in relation to this, customers are advised to also refer to the Foreign Exchange Restrictions in the Market Profile) may only be executed on SD+1 if the related securities transaction is confirmed after 13:00 PHT on SD.

Customers should also note that all outbound payment instructions will be sent to the primary CCB – Standard Chartered Bank Philippines - Securities Services and Trust. As for the inward receipt of funds, if these funds are to be used as payment for an against payment trade then they should be received into the CCB. Customers are also advised to refer to the Cash Timings Matrix for cash deadlines.

Dividend payments

Customers should note that it is market practice in the Philippines for Issuers to pay dividends in the form of cheques to the CSD. These require a 3-day clearing period from payment date before they are credited to the customers. However, the Cheque Image Clearing System (CICS) aims for a 1-day clearing period.

Trade Settlement

Purchase trades can be funded by long balances for value on SD.

Trades, funded via a transfer from a third party bank, will be sent for market settlement when funding is received and confirmed by SD-1 14:30 PHT . If there is no funding by the cut-off time, CBL will attempt to settle the trade on a best efforts basis but cannot guarantee that the trade would not fail. Customers should also note that the MT210 pre-advice is not an actual guarantee for receipt of funds.

Securities to be delivered to a counterparty must be provisioned before instructions are released to the market.

Partial settlement

No partial settlement will be accepted.

Physical certificates

Physical certificates are accepted by CBL for dematerialisation only.

CBL does not perform actual settlement of physical securities. In order to avoid delays in settlement when buying or selling shares via the Exchange, the certificates must be in scripless form.

The general documentary requirements for conversion from physical to scripless form are as follows:

  • Endorsed stock certificate (should be endorsed by authorised signatories of the registered name on the certificate);
  • Consularised and certified true copy of the company's Articles of Incorporation;
  • Consularised and certified true copy of the By-laws of the company;
  • Consularised and certified true copy of the resolution by the company's board of directors designating the names, business titles and specimen signatures of their authorised signatories;
  • Duly accomplished specimen signature cards;
  • Consularised or certified true copies of at least two (2) valid IDs of authorised signatories (for example, passport, driver's licence, Social Security ID).

Customers are advised to send an MT599 free-format message to Clearstream (BIC: CEDELULL) instructing dematerialisation.

The above-mentioned documentation should be sent to the following address:

Clearstream Banking S.A. Singapore Branch
Attn: Settlements Singapore
9 Raffles Place
#55-01, Republic Plaza
Singapore 048619

The MT599 instruction should include the following wording:

"Please consider this as our instruction to convert our [...] shares of [...] from physical form to scripless form. Please debit our account [...] for the related costs."

Upon receipt of all required documentation from the customer, Clearstream will then proceed to instruct SCB for dematerialisation.

Dematerialisation charges are as follows:

  • Cancellation fee - PHP 20.00/certificate (plus 12% VAT if transfer agent/registrar is not a bank);
  • Issuance fee - PHP 100.00/certificate (plus 12% VAT if transfer agent/registrar is not a bank).

Customers will be informed of the charges that are payable and should arrange, via an MT210 instruction, for funding into Clearstream's cash account 0142683771002.

The conversion process will take between one and three weeks, subject to the submission of all required instructions and documentation. Customers will be informed once the conversion is finalised.

Unlisted Securities

Customers must be aware that the risks associated with holding unlisted securities include:

  • No generally accepted settlement procedure;
  • No standard documentation for settlement of transactions, standard certificate denomination or standard board lot; and
  • No standard documentation for registration in the name of either a transferee or its agent;

and agree to hold Clearstream and its custodian free and harmless from any loss arising from or incidental to any customer holding in unlisted securities, unless such loss is due to the negligence of Clearstream or its custodian.

Back-to-back processing

Back-to-back processing is available for transactions in all dematerialised securities eligible in this market. If both the customer and the domestic counterparty meet their settlement obligations and fulfil the market's back-to-back requirements within the relevant deadlines, the linked receipt and the linked delivery will settle with same-day value. At the same time, customers must ensure that there is adequate funding in place for each of the receipt and delivery transaction. Each receipt and delivery will settle only with same day value when its corresponding funding is received.

Deadlines for the receipt of valid instructions remain unchanged for back-to-back transactions (please refer to “Settlement times”).

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

Connectivity mediumPool ID formatField(s) to be used
CreationOnline16x 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 (/) character nor must it contain two consecutive slash (//) characters.

Management of failed instructions

Please refer to the Settlement Risk section of the Market Profile (Philippines) for more details. Settlement instructions which are still unmatched at the end of the third business day after the first attempted settlement date are automatically cancelled.

In the event that penalties are imposed for failed trades, customers will be notified of the charges and are obliged to ensure funding to cover the penalty fees. Customers should ensure adequate funding in their accounts by SD-1, 14:30 PHT in order to prevent failed trade settlement.

New issues settlement

Transaction settlement in new issues will, when appropriate, take place on settlement date/listing date in the local market. Funding for new issue settlements (pre-advices) must be in place by SD-1 .