Settlement services - Spain

15.01.2021

Pre-matching service

The table below summarises CBL and CBF/LuxCSD'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 and LuxCSD's pre-matching services, see  Pre-matching services for external settlement instructions.

The hold and release feature available in T2S will be used by CBL, CBF and LuxCSD for the pre-matching of settlement instructions in T2S.

Service offered

Method employed

Start
(local time)

All securities

CBF and LuxCSD

The T2S hold/release process allows for a released transaction to be set back to hold as long as it has not settled. Instructions that were sent on “Hold” can be released via a corresponding MT540 – MT543 “NEWM”. The status of a CBF/LuxCSD instruction can be changed via a modification (MT530) until its final settlement. In parallel to the instruction hold flag set by the CBF/LuxCSD customers (“Party hold”) , T2S provides hold information from the counterparty (“counterparty hold”) itself. Hence, the following values can be reported to CBF/LuxCSD customers:

  • “PREA” for Party hold
  • “PRCY” for Counterparty hold

Automated through T2S

On receipt of instructions

CBL

CBL releases pre-matching instructions (PREA) only outside the provisioning period to CBF for matching purposes only. As soon as the start of the provisioning period is reached and provided the provisioning of cash and securities is successful, the settlement instruction (NEWM) will be released to CBF for further processing and settlement in T2S. Once the instruction is released to CBF, it cannot be set back on hold again.

Automated through T2S

On receipt of instructions

Partial release (CBF and LuxCSD)

The table below summarises the CBF and LuxCSD T2S Partial Release service for external settlement instructions. This T2S functionality enables the partial release of the quantity specified in a pending securities settlement instruction and can be initiated with the “Hold / Release functionality” by specifying the quantity to be released. A partial release request can also be cancelled.

Service offered

Method employed

Start
(local time)

All securities

CBF and LuxCSD

T2S will execute the request within all defined Partial Settlement windows during the day and the night-time processing.

CASCADE and CASCADE PC (CBF only)

Partial Release via “Teilfreigabe” and transaction KVAS (Auftragsabwicklung – Settlement Dienst) for the release of an instruction (function code “FA” + “T” (stands for Teilfreigabe)).

SWIFT ISO 15022

The Partial Release request can be instructed via MT530 (:22F::SETT//YPRE + :36B: in sequence C with the security quantity) using Xact via SWIFT or Xact File Transfer.

Xact Web Portal

To create a Partial Release, the option “Creation Partial Release” accessible via list view and detailed view in the Xact Web Portal Settlement screen on existing “On Hold” instructions should be used.

Automated through T2S

On receipt of the delivery instructions in an “On Hold” status.

CBL

Not available

Automated through T2S

On receipt of the delivery instructions in an “On Hold” status.

Matching service

Matching is mandatory for all transactions settling in T2S. In addition to the mandatory matching criteria in T2S the following fields may, if present, be matching criteria.

Additional matching field

The following additional matching fields are initially not mandatory but, when one of the counterparties provides a value for them in its instruction, matching values must be provided by the other counterparty.

  • Opt-out indicator;
  • CUM/EX indicator

Optional matching field

The following optional matching fields must match when provided by both counterparties:

  • Common reference;
  • Client of delivering/receiving CSD participant;
  • Securities account of the delivering/receiving CSD participant.

Note: Clearstream recommends to agree on the usage of a common reference (:20C::COMM) and the T2S Security Account number (SAC) with the counterparty in Iberclear. Both fields are “optional” matching criteria in T2S and avoid cross-matching if it is populated in the Settlement instructions of both parties.

Allegements

T2S will send allegement messages depending on the information indicated in the counterparty’s instruction. The allegements will contain the additional and optional matching criteria described above. These can be used to correctly format instructions to ensure matching if it has not yet been sent to Clearstream Banking or LuxCSD.

All securities

CBF

If the counterparty of the CBF customer instructs first, an allegement instruction will be generated by T2S. T2S will send the allegement message (sese.028) to CBF or to the DCP, without prior validation, whether the ISIN is eligible in the counterparty CSD, that in this case is CBF.

Receipt domestic instructions are automatically generated if the passive matching flag is set on the receiving main account or sub-account. In addition, the generation follows the rules below:

  • For domestic transactions, if the delivering party is an ICP or DCP customer and the recipient is a passive matching participant (ICP/DCP), CBF generates the receipt instruction based on the delivery instruction sent to CBF (ICP) or based on the copy of the DCP instruction (sese.023) received from T2S.
  • For cross-border transactions where the deliverer is a foreign CSD customer and the recipient is a CBF customer (ICP/DCP), the receipt instruction is generated based on the allegement received from T2S.
  • Allegements are not generated for “Already matched” instructions.

CBL

CBL may receive counterparty instructions alleged on its account at CBF and will report them to customers provided that the customer’s CBL account is present in the allegement and the allegement subscription is in place on the customer account.

LuxCSD

If a counterparty's settlement instruction does not match after the first matching attempt, the customer is informed through an allegement message after a predefined period of time (T2S standard service).

Identification of CSDs in T2S

In T2S, all CSDs will be identified by their BIC11. CBL, CBF and LuxCSD customers are required to use the following BIC11 as Place of Settlement for domestic instructions with counterparties in Iberclear:

CSD

BIC11

Iberclear via T2S

IBRCESMMXXX

Identification of the counterparty in T2S

In T2S, the CSD participants are identified exclusively by the combination of their home CSD (for example, PSET DAKVDEFFXXX) and their BIC11.

Counterparty identification

CBF

4710000a (counterparty CSD account in CBF) or alternatively IBRCESMMXXX (BIC11 of the counterparty CSD)b and the T2S Party BIC11 of the CSD participant.

The counterparty CSD BIC is used by CBF to address the CSD where the counterparty is set up as T2S Party. This counterparty's CSD is reflected in CASCADE with a counterparty CSD account. The counterparty CSD BIC has to be used in cross-border instructions with T2S In-CSDs. 

CBL

Home CSD BIC11 and the T2S Party BIC11 of the CSD participant.

If a CBL customer uses a BIC8 to identify the Receiving/Delivering Agent, CBL shall be entitled to modify the BIC8 provided and the settlement instructions will be then processed by default with a BIC11 by adding the default XXX suffix to comply with T2S settlement rules. Accordingly, such customers remain liable for any settlement fails that the use of the BIC8 may cause and the customers furthermore agree to indemnify CBL against losses, liabilities, damages, penalties, expenses and all other costs on any kind suffered by CBL as a result of the customer not complying with the above requirement.

LuxCSD

Home CSD BIC11 and the T2S Party BIC11 of the CSD participant.

----------------------
a. The counterparty CSD account can only be used in the CBF legacy connectivity
b. BIC11 of other T2S In-CSDs possible if the technical configuration in T2S is available.

Note: Cross-border settlement between CSDs in T2S is only possible, if the corresponding technical configuration in T2S for cross-border links has been established by the CSDs linked to each other.

Procedures for domestic counterparties 

CBL

CBL depository – CBF

Non-migrated securities

Place of settlement

IBRCESMMXXX

IBRCESMMXXX

Delivering/Receiving Agent

CEDELULLXXX

BBVAESMMXXX

SAFEof the DEAG/REAG

Should be specified for Spain
as required by Iberclear to
identify CBF as CSD in T2S
(DAKV7201102)

If instructed, it must be the valid SAC
Iberclear: IBRCBBVAESMMXXX000000007T0EX0000004

Buyer/Seller

BIC11 of the CBL customer

CEDELULLXXX in favour of BIC11 of the CBL customer

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a. Although the safekeeping account of Party 1 (REAG/DEAG) is an optional matching field in T2S, if it is present on one instruction only it will only match with instructions instructed by this account.
As CBL does not forward its own SAC to the settlement parties, if the customer counterparty instructs the SAFE of REAG/DEAG it must match CBL's SAC in T2S exactly.
We encourage customers to ask their counterparties not to include the SAFE of the DEAG/REAG in their instructions (also called securities account of the delivering/receiving party).

Important note

All Spanish ICPs are requested by Iberclear to use the Iberclear BIC11 (IBRCESMMXXX) in the Place of Settlement. For Spanish DCPs, the T2S standard applies and hence the BIC11 of the counterparty CSD should be indicated in the Place of Settlement. In addition, Iberclear is asking ICPs to indicate the SAFE of the Delivering/Receiving Agent in their instructions, so that Iberclear can identify the target CSD in T2S.

Cross-border settlement between CSDs in T2S is only possible, if the corresponding technicalconfiguration in T2S for cross-border links has been established by the CSDs linked to each other. For T2S cross-border settlement in Spanish securities between non-Iberclear counterparties and Clearstream Banking, the T2S standard applies. This means that non-Spanish counterparties (that is, for example Monte Titoli participants) must instruct against DAKVDEFFXXX in the Place of Settlement.

Also, ICP counterparties should ask their domestic CSDs or agents for the proper formats to instruct against the CBL omnibus account in CBF. Some CSDs or agents may still have proprietary formats that differ from the format published in the above table. For DCP counterparties, the T2S Settlement standard applies.

CBF

Place of settlement

DAKVDEFFXXX (or IBRCESMMXXX if the counterparty is an ICP in Spain)

Delivering/Receiving Agent

T2S Party BIC11 CBF participant (and SAFE of the DEAG/REAG if the counterparty is an ICP in Spain)

LuxCSD

Place of settlement

LUXCLULLXXX (or IBRCESMMXXX if the counterparty is an ICP in Spain)

Delivering/Receiving Agent

T2S Party BIC11 LuxCSD participant participant (and SAFE of the DEAG/REAG if the counterparty is an ICP in Spain)

Partial settlement

In T2S, partial settlement for eligible instructions is allowed at the last night-time settlement cycle in sequence "X"; and within the real-time settlement period:

  • At 08:00 CET, 10:00 CET, 12:00 CET, 14:00 CET and 15:30 CET.
  • 30 minutes prior to the against payment cut-off time (between 15:30 CET and 16:00 CET).

Within these windows all transactions that are pending due to lack of securities and hold a positive partial settlement indicator are included in the partial settlement processing.

Whether partial settlement will be applied or not depends on the partial settlement indicator set within the instruction or on the customer account setup. A settlement Instruction will settle partially if both Counterparties instruct with the Field :22F::PARQ.

Partial settlement applies only when full settlement is not possible due to lack of securities. T2S will perform partial settlement according to the available position after analysing the partial settlement indicator in the instruction.  The settlement instructions are submitted to a full settlement attempt before being submitted to a partial settlement attempt, if permitted by instruction indicators or customer account setup.

Partial settlement is applicable to domestic and cross-border instructions and is not allowed for PFoD instructions. Also, Partial settlement is not applied if instructions are linked to any other settlement instruction with link type “Before”, “After”, “With” or via pool reference. Partial settlement is not applied if the transaction undergoes a process where a CoSD Hold is used. The unsettled remaining part of a partially settled settlement instruction can be cancelled.

CBF

CBF customers can define within the instruction whether partial settlement is to be applied or not by setting a partial settlement indicator. In addition, they can set a flag on account level (CBF 7-digit account number) that defines the default value to be set to those instructions where the partial settlement indicator is not filled. The flag is maintained within CBF’s static account database and defines which partial settlement indicator is to be assigned to an instruction as default value (NPAR, PART).The flag applies to delivery and receipt instructions.

CBL

As customer delivery instructions are always fully provisioned before being sent to the domestic market, no partial settlement can be performed. For receipts, the partial settlement can take place if the counterparty is short of securities and the instructions are received by T2S within the times set above.

When CBL customers access T2S via CBF, the default set up will be Partial Settlement. Customers that do not wish their transactions to settle partially must provide the No Partial Settlement indicator (NPAR) in their instruction.

LuxCSD

LuxCSD customers can define within the instruction whether partial settlement is to be applied or not by setting a partial settlement indicator.

Allowed countervalue difference

The following T2S cash tolerances will apply to instructions (against payment instructions in EUR only):

  • EUR 2 for transactions with an amount equal to or less than EUR 100,000; and
  • EUR 25 for transactions with an amount greater than EUR 100,000.

In the event of a discrepancy within the limits, in principle the cash amount of the delivering party will prevail.

For non-EUR currencies, the T2S cash tolerances apply to against payment instructions in foreign currencies between CBL and CBF participants (not applicable to LuxCSD).

Bridge settlement (CBL only)

CBL customers can settle Iberclear T2S- eligible securities via the Bridge. This service is not available for CBF and LuxCSD customers.

Back-to-back processing (Transaction Linking)

Back-to-back processing is available for transactions in Iberclear T2S eligible securities.

Cancellation

Unmatched instructions can be cancelled unilaterally, at any time, by the party who placed the instruction or until cancelled by T2S.

Matched instructions must be cancelled bilaterally by both counterparties.

Recycling rules

Unmatched instructions will be recycled for 20 business days (starting from the initial settlement date), after which they will be cancelled.

Unmatched cancellation requests will be recycled for 20 business days (starting from the date of receipt).

Matched, but not settled instructions will be cancelled by T2S after 60 business days (starting from the date of receipt, or on the day the last modification was sent for this instruction).

New issues settlement

Customers interested in the service for new issues of Iberclear government bonds should contact Clearstream Banking Customer Service or their Relationship Officer.

Specific settlement rules

In Spain, ownership details (also called registration details) are recorded when securities are purchased in the Spanish market. The securities registration is automated and processed by Iberclear via Settlement in T2S and Iberclear (central registry function) is keeping the securities balances of its participants based on settled transactions in T2S.

In parallel, trade registration details on i.e. ownership information for equities will have to be registered in a so-called Post-Trading-Interface (PTI) acting as the second-tier register (detailed registry). The PTI information system is owned by Iberclear. All Iberclear participants are requested to load relevant ownership and transaction type information into Iberclear`s PTI pecifically after the Reform of the Settlement System in Spain and following Iberclear`s migration to T2S, Settlement and Registration have been decoupled, so they i.e. follow different timelines (Settlement in T2S is T+2 vs. PTI reporting can take up to T+6)

The PTI contains data on all transactions, events and entries, that could trigger variations in the securities positions of each owner.

CBF is responsible to report any settled CBF customer transactions, regardless if cross-border, domestic between two CBF participants, or as a result of SE/CCP Settlement, to the PTI.

Re-registration procedure

Registry reporting details and registration procedures

Whenever the transaction of shares involves a change in the second-tier register, a re-registration is required in order to adjust the registry details accordingly.. The re-registration in the Spanish Market supported by CBF as Investor CSD in T2S takes place through one of the following methods:

Registration via OTC

The OTC trade in the Spanish Market can only be used to instruct the settlement of purchases or sales on securities listed in the Stock Exchange and being executed Over The Counter. The OTC allows the parties to concentrate the whole settlement chain (that is, transfer of shares and registration) in just one instruction. With this type of transaction, the change of registry stands on the final settlement of the OTC.

Registration via Change of ownership (OWNE)

This transaction needs the Stock Exchange supervision and supportive documentation is required in each case. The supportive documentation must be provided by customers to CBF upon request of market authorities to evidence the underlying sale/purchase agreement. As any bilateral trade, the settlement is agreed between the parties, and trades can therefore be matched and settled the same day. OWNE transactions can be used in the following cases: mergers, spin offs; transfer free of payment.

Settlement format OTC/OWNE for CBF customers:

Delivering/Receiving Party - Party level P1 (Iberclear) participant BIC11

The T2S Party BIC11 of the Iberclear participant needs to be used in x-border instructions with a Spanish counterparty in P1.

Buyer/Seller – Party level P2 (Beneficiary)

Although the final beneficiary in P2 (Buyer/Seller - Beneficiary) is an optional matching criteria in T2S, these fields should always be completed in the following cases, as per established market practices:  

  • If the counterparty is a Spanish resident, the Tax ID must be provided in P2.
  • If the counterparty is not a Spanish resident, then either the BIC or, if the BIC is not available, Iberclear's assigned CODnnnnnnnn code must be provided.
  • Also, the final beneficiary in P2 (Buyer/Seller - Beneficiary) can be one of the following:
    • A third-party non-resident non-Spanish individual, whose identifying code will be as follows: Tax Identification Number (NIF), if available; or If the NIF is not available, a foreigner identification number (NIE); or
    • A third-party resident legal entity, whose identifying code is the Tax Identification Code (CIF).
    • A third-party Spanish resident or non-resident individual, whose identifying code is the NIF/NIE.

Overview of transaction types

Registration procedure

Settlement impact and transaction types to be used

Description and comments

OTC purchase/Sale with change of registration

Standard T2S Settlement, no additional format required.

  • Used for all OTC transfers that require a change of registration including NCBO transfer
  • No impact on the Settlement format for CBF customers, but CBF will report all OTC instructions to Iberclear's PTI with a specific OTC transaction type.

Change of ownership other than OTC (OWNE)

CBF settlement format

:22F::SETR/COEX/OWNE

CBL and LuxCSD settlement format

:22F::SETR//OWNE

Free of payment only

Transaction type OWNE is used in case of ownership transfers other than purchase and sale of securities (OTC), that is, merger, spin offs etc.


No change of ownership (OWNI)

CBF settlement format:

:22F::SETR/COEX/OWNI

CBL and LuxCSD settlement format:

:22F::SETR//OWNI

(Iberclear has a validation in place to check that the final owner, that delivers and receives the securities are the same)

Transaction type OWNI is used in case of transfers where there is no change of ownership of the trade (both legs should communicate the same ownership)

Ancillary transactions (“OAUX”) – for Equities only, not applicable to Bonds.

CBF settlement format

:22F::SETR//TRAD + :70E::DECL///SETR 801

CBL and LuxCSD settlement format

:22F::SETR//TRAD + :70E::DECL///SETR 801

(where 801 is the new UEB-GRUND value) for CASCADE

Ancillary transactions ("OAUX") are bilateral trades settling against a financial intermediary (i.e. broker) that is a specific participant of Iberclear having an account at CCP level, which is directly linked with an account at Iberclear.

Lending Trades

(SECL/SECB)

CBF settlement format

:22F::SETR/COEX/SECB and :22F::SETR/COEX/SECL

CBL and LuxCSD settlement format

:22F::SETR//SECB and :22F::SETR//SECL


This information is mandatory to identify lending/borrowing instructions but will not be used for matching or settlement purposes in T2S.

Important Note:

Customers are highly recommended to agree with the Spanish counterparty on the Trade type to be used. The Trade type “TRAD” will be reported by CBF to Iberclear's PTI for any Standard T2S Settlement instruction as a default, see table above and is not relevant for T2S Settlement.

Nevertheless, the Trade Type reported to the PTI will be reconciled by Iberclear with the Trade Type reported by the counterparty and must match for reconciliation purposes.  Any Trade Type discrepancies need to be resolved between the counterparties within six business days after settlement in T2S has taken place.