Change in validation of the field "Place of Trade"
In Announcement D19058 dated 10 January 2020, Clearstream Banking AG, Frankfurt1, informed customers about the changes in the processing of the data field "Place of Trade". With the introduction of CBF July Release 2022, the validation of the Market Identification Code (MIC) in this data field in CASCADE OTC instructions will no longer apply. The functional amendment will be effective on
Monday, 4 July 2022
CBF's securities settlement follows the principles defined by TARGET2-Securities (T2S). Although CBF performs an initial plausibility check for instructions presented in "Indirectly Connected Participant (ICP) mode", the final validation by T2S is essential for a successful processing.
With the deployment of the change request T2S-0606-SYS “T2S should maintain and report information related to 'Place of Trade' and 'Place of Clearing' of a settlement instruction consistently across T2S messages" in November 2019, CBF adjusted the validation of the data field "Place of Trade". Since then, for the Market Identification Code (MIC), a plausibility check is performed in all CBF instruction types that support the field “Place of Trade / BOERSENPL”.
A corresponding validation has not been established on T2S, so that under certain conditions an instruction transmitted in "Directly Connected Participant (DCP) mode" is accepted by T2S but cannot be processed by CBF. The difference in rules can result in a system level blocking by CBF ("CSD Hold") so that these instructions cannot settle.
With the implementation of CBF July Release 2022, CBF will change the validation of the four-digit Market Identification Code (MIC) for CASCADE OTC instructions. In future, only the format of this value will be checked (alphanumeric and four-digit). A validation against the ISO 10383 standard list provided by SWIFT will no longer be performed. From that date, market participants will be asked to ensure that a valid MIC is provided in settlement instructions. This means that the "Place of Trade / BOERSENPL" information can still be provided and will be displayed by CBF in the settlement reporting in field ":94B::TRAD//EXCH".
The arrangement for MIC made with the stock exchanges or with their contracted service providers for settlement of stock exchange trades remains unchanged. This means that values compliant with ISO Standard 10383 will continue to be delivered in trade confirmations.
Customers acting in ICP mode are requested to check the settings stored in their systems for the provision of the MIC and / or the reporting of the code in subsequent processing.
Customers have the opportunity to enter test cases in the CBF customer simulation environment (IMS23) with regard to the modified CBF functionality. No special system requirements are necessary for the instruction so that the test can be performed in "Free Simulation Mode". The availability of test environment can be checked on the respective website.
Please contact your Relationship Officer if you have questions. Particular questions related to the removal of the validation for the field “Place of Trade” will be routed to the experts of the CBF Settlement Functionality team.
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.