Singapore: Changes arising from SGX new Post-Trade System Phase 2

27.11.2018

Clearstream Banking1 informs customers that effective

10 December 2018

the Singapore Exchange (SGX) and The Central Depository (Pte) Limited (CDP) will implement changes to the Singapore market following the implementation of the second phase of their new post-trade system. Customers are asked to note the changes below, that will become effective as of that date.

Note: Singapore Government debt securities held at the Monetary Authority of Singapore (MAS) will not be impacted by any of the changes.

Impact on customers

Change of settlement cycle

The settlement cycle for equities and on-exchange corporate bonds instructions settling in SGX CDP’s new settlement system (SGX-PTS WEB) will follow a T+2 cycle and will be effective on trades with a Trade Date of 10 December 2018 and later.

Notes for customers

  • Settlement instructions with Trade Dates of 5, 6 and 7 December 2018 will follow the T+3 settlement cycle and will be settled in the new CDP settlement system.
  • Last Trade Date for T+3 is 7 December 2018.
  • Due to CDP’s unwinding of earmarkings when they transition to their new system over the weekend of 8 and 9 December 2018,
    • trades that are in a matched status on 7 December 2018 may potentially not settle on 10 December 2018 as the prioritisation in settling instructions is applied by the new system;
    • trades that are failing by 7 December 2018 due to insufficient securities will be subject to partial settlement when they are transitioned to the new system on 10 December 2018;
    • trades that failed in PSMS by 7 December 2018 will be expired in PSMS. Such trades will be re-created as past-valued trades in the new settlement system on 10 December 2018 so no action is required by customers. Do note though that once re-created in the new system, partial settlement will become possible.

Tuesday
4/12/18

Wednesday
5/12/18

Thursday
6/12/18

Friday
7/12/18

Saturday
8/12/18

Sunday
9/12/18

Monday
10/12/18

Tuesday
11/12/18

Wednesday
12/12/18

T

T+1

T+2

T+3

 

 

 

 

 

 

T

T+1

T+2

 

 

T+3

 

 

 

 

T

T+1

 

 

T+2

T+3

 

 

 

 

T

 

 

T+1

T+2

T+3

 

 

 

 

 

 

 

T+1

T+2

Two types of settlement: Batch and Real Time Gross Settlement (RTGS)

Investors will have a choice of batch settlement or RTGS when settling their instructions via CDP. Clearstream Banking will support both RTGS and batch settlement.

Batch settlement: CDP will initiate their batch runs on SD (T+2) from 13:30 to 15:30 SGT. Settlement confirmations are expected from 15:30 to 16:30 SGT.

Notes for customers

  • There will be a new batch settlement deadline (see New DVP framework with new securities timelines below), a new expected settlement timing and new provisioning timing.
  • Customers opting to settle by batch or RTGS must ensure that they provision according to the type of settlement. This information will be stated in the updated Market Link Guides.
  • All trades (both AP and FOP) not settled during batch settlement on SD will not be automatically attempted under RTGS FOP.
  • Customers attempting to settle (via RTGS) trades that are not settled during batch settlement can only reinstruct as RTGS FOP by using the RTGS indicator :22F::RTGS/YRTG.

RTGS: Customers can opt for RTGS settlement in the market. The usual provisioning is expected as well for RTGS before your settlement instruction is released to the market.

Notes for customers

  • Customers must use the indicator :22F::RTGS/YRTG in their instructions.
  • RTGS trades not settled on intended settlement date will be rolled over to the next business date as RTGS.
  • Partial settlement does not apply to RTGS.
  • Cleared trades against clearing members settle in batch mode only. RTGS trades with onward deliveries to settle such cleared trades should therefore settle before each day's batch run. Therefore, RTGS settlement instructions to fulfil such obligations should be received by CBL before or by SD 12:15 SGT while instructions without such obligations can be received by SD 14:15 SGT. Customers must be aware of the different deadlines to ensure they fulfil their obligations accordingly (see below).
  • SGX will apply a fee of SGD 5 for each RTGS settlement instruction.

New DVP framework with new securities timelines

The timelines for securities batch settlement under the new settlement system will be revised.

  • Batch runs: 13:30 SGT to 15:30 SGT.
  • Batch settlement confirmation by CDP: Between 15:30 SGT to 16:30 SGT.

Following the new timelines, Clearstream will enhance its customer securities deadlines as follows:

Batch Settlement

Singapore time (SGT)

Luxembourg CET
(Winter)

Against Payment

SD 12:15

SD 05:15

Free of Payment

SD 12:15

SD 05:15

 

RTGS

Singapore time

(SGT)

Luxembourg CET
(Winter)

Remarks

Against Payment (1)

SD 12:15

SD 05:15

RTGS RVP/DVP settlement instructions with same day onward delivery obligations to Clearing Membersa of CDP

Against Payment (2)

SD 14:15

SD 07:15

RTGS RVP/DVP settlement instructions without same day onward delivery obligations to Clearing Members of CDP

Free of Payment

SD 16:55

SD 09:55

 

a. Cleared trades against Clearing Members settle in batch mode only. RTGS trades with onward deliveries to settle such cleared trades should therefore settle before each day's batch run. Therefore, RTGS settlement instructions to fulfil such obligations should be received by CBL before or by SD 12:15 SGT while instructions without such obligations can be received by SD 14:15 SGT. Customers must note the different applicable deadlines to ensure they fulfil their obligations accordingly.

New cash deadlines

To support the new DVP framework, and in a constant effort to provide a better service to customers, Clearstream will enhance its customer cash deadlines as follows

Change of cash deadlines as shown below.

SGD deadline

Singapore time

Luxembourg CET
(Winter)

Current

VD 14:45

VD 07:45

From 10 December 2018

VD 16:00

VD 09:00

The introduction of mandatory partial settlement

Partial settlement will become available in the market and will be mandatory on trades settling as batch. It will also apply to linked trades instructed with linked indicators "AFTE" and "BEFO". Clearstream runs provisioning checks on both cash and securities before releasing customers’ instructions for settlement.

Notes for customers

  • Customers may see their trades partially settle if the counterparty is short on cash or securities.
  • Customers will receive the regular settlement reporting on partially settled trades.
  • If a linked RVP trade settles partially, the DVP trade linked to the RVP trade will not settle.

Introduction of linked trades

Clearstream supports linked trades on both equities and corporate bonds.

Notes for customers

  • Customers must  continue to indicate the POOL reference and SETR//TURN in their turnaround trades settlement instructions.
  • If a linked RVP trade settles partially, the DVP trade linked to this RVP trade will not settle.
  • If a linked RVP trade fails, the DVP trade linked to the RVP trade will fail too.

A change in the market buy-in process

With the new T+2 settlement cycle, the timeline for buy-ins has been revised to begin on the Intended Settlement Date (ISD) at 15:30 SGT. Settlement of the buy-in will take place on the next business day. If the buy-in is unsuccessful by ISD+6, the trade will be cash settled to ensure closure.

A change in the half-day settlement run

The settlement of half-day trading will be aligned with the full day settlement timeline, and settlement runs at the CDP will begin at 13:30 SGT.

Notes for customers

  • The full day securities settlement customer deadline will apply (see New DVP framework with new securities timelines above).
  • Settlement confirmations from the market can only be expected from 15:30 SGT onwards.
  • Buy-ins for fails on half-day trading will not proceed as trading ends earlier than the settlement run, at 12:00 SGT.

Change in currency holiday

To harmonise the movement of securities and cash, settlement of instructions in USD will only take place on common business days between the U.S.A. and Singapore.

Customers should take note of the currency holidays between Singapore and the U.S.A.

Reminder on the use of fields :94B:: and :22F:: in all settlement instructions

Customers are reminded that it is mandatory for fields :94B:: and :22F:: to be included in all settlement instructions on both corporate bonds and equities. Please refer to our Announcement A16090 regarding this requirement. These two fields are mandatory requirement in the new settlement system SGX-PTS WEB, and customers are requested to ensure that these fields are complete in order to avoid the rejection of instructions.

Further information

The Market Link Guide – Singapore will be updated accordingly and available on the effective date to reflect the changes.

For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.

_________________________________________

1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.