Stock Exchange and Eurex central counterparty (CCP) trades

22.07.2021

Stock exchange (SE) trades coming from the Frankfurt Stock Exchange via Xetra are transferred through the Eurex CCP-System into CASCADE LION (Lieferfreigabe online) and forwarded to T2S for settlement. Stock exchange trades (non-CCP) in collective safe custody (CSC) and non-collective safe custody (NCSC) securities from German Regional Stock Exchanges are routed via XontroTrade to CASCADE LION and forwarded to T2S.

Currently Eurex only forwards CCP instructions (delivery surplus and gross trades) in CSC securities to CASCADE. These instructions are forwarded to T2S for settlement of securities and cash in EUR.

The figure below illustrates the current settlement processing flow for non-CCP SE and Eurex CCP trades.

CBF will change the processing of stock exchange instructions. The main objective of the project “Stock Exchange Transactions Go OTC (SET-GO)” is to use the standard OTC functionality for non-cleared stock exchange trades. The current Lieferfreigabe Online (LION) functionality for the instruction management for non-cleared stock exchange trades will be replaced. A two-phased implementation approach has been defined for SET-GO:

  • ICSD Migration (Phase 1) – 22 November 2021: Instruction and lifecycle management for stock exchange instructions in NCSC securities to be executed and reported via Creation only;
  • CSD Migration (Phase 2) – 13 June 2022: Instruction and lifecycle management for stock exchange instructions in CSC / NCSC-T securities to be executed and reported via CASCADE / T2S.

For further details about the project, please refer to the Stock Exchange Transactions Go OTC - Introduction Note (May 2021) attached below. 

Details regarding the SET-GO ICSD Migration Customer Simulation can be found in the related guideline. Customers wishing to participate in the simulation are requested to return the completed registration form by 23 July 2021.

As of 22 November 2021, the transaction reference for stock exchange instructions in custody type NCSC will have a new structure. The unique Sender's Message Reference (SEME) will be generate by the CBF Stock Exchange Transaction Interface (SETI). A “SEME Generator” has been developed for testing purposes.

CBF will offer dedicated migration reports for the ICSD migration in November 2021 and CSD migration in June 2022. Customers interested in such reports are invited to submit the attached order form. The due dates for obtaining the report of the respective migration step in simulation and / or production are shown in the cover letter of the form.