CFCL Settlement – France

Settlement process in T2S

Please refer to the Settlement process in T2S for the complete information about the Settlement process in T2S.

Settlement services

Pre-matching service

The table below summarizes CFCL's pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. For details of CFCL's pre-matching services, see Pre-matching services for external settlement instructions.

The hold and release feature available in T2S will be used by CFCL for the pre-matching of settlement instructions in T2S.

Matching service

Matching is mandatory for all transactions settling in T2S. In addition to the mandatory matching criteria in T2S, the following fields may, if present, be matching criteria.

Additional matching fields

The following additional matching fields are initially not mandatory but, when one of the counterparties provides a value for them in its instruction, matching values must be provided by the other counterparty:

• Opt-out indicator;
• CUM/EX indicator.

Optional matching fields

The following optional matching fields must match when provided by both counterparties:

• Common reference;
• Client of delivering/receiving CSD participant;
• Securities account of the delivering/receiving CSD participant.

Note: Clearstream recommends to agree on the usage of a common reference (:20C::COMM) and the T2S Security Account number (SAC) with the counterparty in Euroclear France. Both fields are ”optional” matching criteria in T2S and avoid cross-matching if it is populated in the Settlement instructions of both parties.

Allegements

T2S will send allegement messages depending on the information indicated in the counterparty’s instruction. The allegements will contain the additional and optional matching criteria described above. These can be used to correctly format instructions to ensure matching if it has not yet been sent to Clearstream Fund Centre.

Identification of CSDs in T2S

In T2S all CSDs will be identified by their BIC11. CFCL clients are required to use the following BIC11 as Place of Settlement for domestic instructions:

Identification of the counterparty in T2S

In T2S, the CSD participants are identified exclusively by the combination of their home CSD (i.e., PSET DAKVDEFFXXX) and their BIC11.

Procedures for domestic counterparties

This section describes the procedures for domestic counterparties of the French market, which is both a domestic and a register market.

CFCL

a. Although the safekeeping account of Party 1 (REAG/DEAG) is an optional matching field in T2S, if it is present on one instruction only it will only match with instructions instructed by this account.

As CBL does not forward its own SAC to the settlement parties, if the client counterparty instructs the SAFE of REAG/DEAG it must match CBL's SAC in T2S exactly.

We encourage clients to ask their counterparties not to include the SAFE of the DEAG/REAG in their instructions (also called securities account of the delivering/receiving party).

CEU

To avoid failed matching, counterparties in OPCVM subscription and redemption transactions must agree on the instruction format to be used

ODM Domestic transfers via BNP Paribas S.A. account 030:

• For “ordre de mouvement” (ODM) transfers, domestic counterparties that want to deliver or receive securities free of payment into/from CBL’s account in BNP Paribas S.A. must always send the respective instruction, as follows:

Procedure for the domestic counterparty;

Receipt in CBL / Delivery from CBL;

Receive from / Deliver to: BNP Paribas S.A.: account number 030 PARBFRPP;

For the account of (optional): CBL: either BIC CEDELULL or account number 44428N;

In favour of: Account number in CBL of the final beneficiary or ordering party;

• The instruction will be executed, in dematerialised form only, by BNP Paribas S.A. outside of ESES

Partial settlement

In T2S partial settlement for eligible instructions is allowed at the last night-time settlement cycle in sequence ‘X’; and within the real-time settlement period:

• At 08:00 CET,10:00 CET, 12:00 CET, 14:00 CET and 15:30 CET;
• 30 minutes prior to the DvP cut-off time (between 15:30 CET and 16:00 CET

Within these windows all transactions that are pending due to lack of securities and hold a positive partial settlement indicator are included in the partial settlement processing.

Whether partial settlement will be applied or not depends on the partial settlement indicator set within the instruction or on the client account setup. A settlement Instruction will settle partially if both counterparties instruct with the Field :22F:: PARQ.

Partial settlement applies only when full settlement is not possible due to lack of securities. T2S will perform partial settlement according to the available position after analyzing the partial settlement indicator in the instruction. The settlement instructions are submitted to a full settlement attempt before being submitted to a partial settlement attempt (if permitted by instruction indicators and/or client account setup).

Partial settlement is applicable to domestic and cross-border instructions and is not allowed for PFoD instructions. Also, Partial settlement is not applied if instructions are linked to any other settlement instruction with link type Before’, ‘ After’, ‘With’ or via pool reference. Partial settlement is not applied if the transaction undergoes a process where a CoSD Hold is used. The unsettled remaining part of a partially settled settlement instruction can be cancelled.

Allowed countervalue difference

The following T2S cash tolerances will apply to instructions (against payment instructions in EUR only):

• EUR 2 for transactions with an amount equal to or less than EUR 100,000;
• EUR 25 for transactions with an amount greater than EUR 100,000.

In the event of a discrepancy within the limits, in principle the cash amount of the delivering party will prevail.

For non-EUR currencies, the T2S cash tolerances apply to against payment instructions in foreign currencies between CFCL and CEU participants.

Settlement with Euroclear (CBL only)

CBL as a sub-custodian of CFCL clients can settle Euroclear France T2S- eligible fund securities.

Back-to-back processing (Transaction linking)

Back-to-back processing is available for transactions in French T2S eligible securities.

Cancellation

Unmatched instructions: can be cancelled unilaterally by the party who placed the instruction at any time or until cancelled by T2S.

Matched instructions must be cancelled bilaterally by both counterparties.

Recycling rules

Unmatched instructions will be recycled for 20 business days (starting from the initial settlement date), after which they will be cancelled.

Unmatched cancellation requests will be recycled for 20 business days (starting from the date of receipt).

Matched, but not settled instructions will be cancelled by T2S after 60 business days (starting from the date of receipt or on the day the last modification was sent for the instruction).

ODM transfers

The few securities that are not eligible for settlement in EF can be transferred in the market via “ordre de movement” (ODM). ODM transfers are routed through the registrar of the security, that registers the name and address of the final beneficiary and the name of the custodian of the security.

Clients are requested to indicate in their instructions whether the ODM transfer is to be executed with or without change of final beneficiary. If there is a change of final beneficiary, clients must provide, in the instruction narrative, details to identify the final beneficiary. The ODM settlement process can take up to three weeks.

Representative certificates

Representative certificates are issued to allow French dual-market shares to be traded on other markets where the securities still exist in physical form. The format requested to execute settlement is included in the section of the transaction specification. In the case of incomplete instructions, CFCL will act on a “best efforts” basis.