EU CSDR Settlement Discipline Regime: Penalties dry-run - CBL
As previously communicated in Announcement A20047, Clearstream Banking1 will activate the functionalities relating to the identification, calculation and reporting of cash penalties in dry-run mode from 5 July 2021 to 31 January 2022.
Calculation and application of cash penalties
Form 5 July 2021, Clearstream Banking will calculate and apply cash penalties for settlement fails on internal instructions (against Clearstream Banking counterparties) and Bridge deliveries (against Euroclear Bank counterparties).
Note: During the dry-run Clearstream Banking will calculate cash penalties based on Cash Discount Penalty Rate of June 2021. The rates will not be updated during the dry-run.
From 5 July 2021 customers can schedule the new MT537 Statement of Cash Penalty report in Xact Web Portal. Two new reports are available:
- Daily Statement of Cash Penalties: This includes details of the calculation;
- Monthly Aggregated Report: this includes the global net amount of cash penalties to be paid or received by the customer.
Customers who do not have access to Xact Web Portal can send a SWIFT MT599 to the attention of PRGconnect asking for the report to be scheduled. In the message, the following information must be specified:
- Account number(s);
- Receiving BIC;
- Report Type and its frequency:
- Daily Statement of Cash Penalties:
- Monthly Aggregated Report: Yes / No
- Daily Statement of Cash Penalties:
In addition, the Xact Web Portal will be enhanced to enable customers to query and monitor the cash penalties related information.
Scope of reported cash penalties
Cash penalties on
Direct link to CBF
Link to local depository
5 July - 14 September 2021
15 September 2021 - 31 January 2022
a. Will be included "on-the-fly", provided that the relevant CSD or depository provides dry-run possibilities and reports cash penalties to Clearstream Banking.
From the date when the cash penalty was reported and, latest, until the 10th PBD (penalties business day) of the next month (the "appeal" period), Clearstream Banking customers may challenge, for exceptional reasons, the application or calculation of a cash penalty, exclusively by using Xact Web Portal to address appeals to Clearstream Banking. Appeals sent via other communication media will not be considered.
Note: A maximum of 3 appeals per Xact Web Portal Organisational Unit can be sent during the dry-run.
During the dry-run testing, only customer appeals requesting a) to "amend" the underlying price used to calculate penalties by Clearstream, or b) to completely remove penalties, will be accepted and trigger the recalculation or removal of a penalty. Other appeal types will be rejected.
Important note: Customers that have not migrated to Xact Web Portal are strongly recommended to do so in order to be able to receive penalties information and to address appeals to Clearstream Banking.
Collection and distribution of net amounts
Clearstream Banking will not collect and distribute cash penalty fees during the dry-run. After the end of the dry-run, and activation of the settlement discipline on 1 February 2022, cash penalties calculated and applied during the dry-run will not be collected or distributed either.
Detailed technical specifications about the calculation, application and reporting of cash penalties are available here.
Detailed information about the Xact Web Portal is available here.
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.