OneClearstream Migration for French Registered Securities - CBF - update

06.02.2019

Note: This Announcement, originally published on 25 January 2019, has been amended to draw customers attention to an important migration impact update and provide updated securities lists in scope for the migration.

Following Clearstream Banking’s1 announcement C18043 and effective

18 February 2019

Clearstream Banking will enhance its current OneClearstream service offering on the French market by extending the scope of the eligible assets to cover the French registered securities.

The migration will impact only the two below categories of French registered securities existing on the French market:

  • Essentially registered shares (VEN);
  • Occasionally registered securities subject to LBS program (VON subject to LBS).

The LBS securities category will not be part of this migration. These securities will be migrated at a later stage during the year 2019 (target is before LBS season).

Settlement and migration impacts

After the activation, direct settlement between CBF customers and T2S counterparties in Euroclear France will be possible for the following three ISINs already available in CASCADE:

  • ISIN FR0000121261 Michelin S.A;
  • ISIN FR0000130213 Lagardère S.C.A, and;
  • ISIN FR0010040865 Gecina S.A.

Note: For the above ISINs, the following new settlement deadlines for cross CSD instructions will be applicable to customers:

Link

Current EUR AP deadline

New EUR AP deadline

Current FOP deadline

New FOP deadline

Euroclear France via CBF

15:45 SD

15:55 SD

17:45 SD

17:55 SD

Cleared and non-cleared stock exchange flows

The routing of these instructions will continue to follow the current logic which is described in the OneClearstream Functional specifications in section 3.3.2 “Settlement flows”.

OTC instructions

CBF customers will settle directly from their CBF account via the T2S settlement platform. Similar to other OneClearstream migrated securities in CBF, French registered securities can be settled using the following OTC settlement instructions:

  • Domestic instructions (that is a T2S Intra-CSD) between CBF customers;
  • Cross-border instructions, that is a transaction between a CBF customer and a counterparty with another T2S In-CSD;
  • Instructions with CBL participant;
  • Realignment related to a CBF 6-series account (using the realignment for the French market).

Procedure for domestic counterparties

  • For all migrated securities from 18 February 2019, T2S counterparties should adapt their instructions format, and especially for VEN securities as CBF customers will be directly reachable. To do so, the place of settlement to be used will be DAKVDEFFXXX for all migrated securities. 
  • For the non-migrated LBS securities, local counterparties should continue using current instruction formats as CBL will keep these securities on its accounts with ESES via BNP Paribas Securities Services.

Portfolio migration preparation

  • On Monday 11 February 2019, the VON positions (in registered form only) will be transferred by Clearstream from the Main account XXXX-000 to the sub-account XXXX-203 (if the CBF account customer is the holder of such a position). If a customer holding a 6-series account has opted to transfer its position to their CBF account, Clearstream Banking will take care of the transfer;
  • On Thursday 14 February 2019between 16:00 and 18:00, Clearstream will prepare the technical setup and adaptations required for the migration from CBL to CBF, and the above listed three VENs cannot be realigned between CBF and CBL counterparties for technical reasons.

Handling of realignments in the pre-migration period

In order to avoid settlement delays, we highly recommend customers to initiate any realignment between CBF and CBL before 16:00 on Thursday 14 February 2019 by using the existing format for Transfer of securities between CBL and CBF counterparties published in the Market Link Guide - International (CBF).

At 16:00 and due to the technical adaptations required, this format becomes invalid.

After 16:00, customers are requested to instruct in the new format published in the Market Link Guide - France, but any realignment instruction received after 16:00 will stay pending and will settle only once the migration has been completed successfully on Friday 15 February 2019.

This realignment format for non-migrated securities is valid until the start of the migration at 12:00 on Friday 15 February 2019.

Management of pending cross-CSD instructions on Thursday 14 February 2019

All pending instructions in T2S (matched or unmatched) will be cancelled between 16:00 and 18:00 if not settled in the meantime.

Tax impact

Announcement D17073 published on 15 June 2018 referring to “France T2S: Tax impact on account structure and service offering” continues to apply also for the migration of VEN/VON with the following exceptions:

Segregation of holding at sub-account XXXX203

The sub-account XXXX203 dedicated to French registered securities will be opened for the main account and no further segregation per tax rate can be performed within this sub-account. Consequently, tax relief requests for positions held on behalf of several beneficial owners on sub-account XXXX203, must exclusively be sent via SWIFT MT565 or Xact Web Portal instruction before each income event including the tax rate per applicable holding.

Tax certification

Impact on customers holding French T2S eligible securities migrated to CBF

No renewal is required for this migration if valid certification has been submitted already for the activity performed through CBF acting as French tax agent. However, customers must request the duplication of existing certificates on the new created sub-account(s).

Impact on customers only holding the following VEN eligible in CBF:

  • ISIN FR0000121261 Michelin S.A;
  • ISIN FR0000130213 Lagardère S.C.A; and
  • ISIN FR0010040865 Gecina S.A.

The duplication and renewal process is the one described in Announcement D17073.

Impact on customers with no holdings in T2S eligible French securities migrated to CBF

The duplication and renewal process is the one described in Announcement D17073.

To certify the sub-account XXXX203, customers are required to send a SWIFT MT599 or Message Exchange via Xact Web Portal requesting the duplication of existing certificates and indicating the following:

  • Request for duplication of tax certificates
  • ATTN: Tax Services
  • Market: France VEN/VON
  • Source Account:
  • Destination Account: Clearstream Banking references of the impacted certificate(s):
  • The following text:

«We hereby confirm that above-mentioned original tax certificate(s) is/are still valid and should not be revoked. We irrevocably authorise Clearstream Banking to apply tax relief based on the information contained in the original tax certification duplicated for the destination account.

We hereby appoint Clearstream Banking and Clearstream Banking depository for the Securities as our attorneys-in-fact with authority to collect and forward the tax certification or a copy of the tax certification, any attachments and any information relating to it to the tax authorities if these prove relevant to any administrative or legal proceedings or official inquiries undertaken or threatened.

We accept full responsibility and indemnify Clearstream Banking in the case of any claims or additional taxes, interest thereon or penalties levied by tax authorities in connection with any payments made in reliance upon this duplication of certification including any additional information provided in connection to it.

We certify, under penalty of perjury, that the information contained in the tax certification is true, correct and complete»

Impact on non-migrated LBS securities

The service description for the handling of the LBS securities, in term of portfolio transfer or asset servicing published below will not be applicable until those securities will be migrated to CBF.

Further information

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

------------------------------

1. This announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.