CFCL Settlement – Italy
Reference
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.
Service offered | Method employed | Start (local time) | |
All securities (except physical securities via CBL/Intesa Sanpaolo | |||
CFCL | CFCL releases pre-matching instructions (PREA) only outside the provisioning period to CEU for matching purposes only. As soon as the start of the provisioning period is reached and provided the provisioning of cash and securities is successful, the settlement instruction (NEWM) will be released to CEU for further processing and settlement in T2S. Once the instruction is released to CEU, it cannot be set back on hold again. | Automated through T2S | On receipt of instructions |
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 agreeing on the usage of a common reference (:20C::COMM) and the T2S Security Account number (SAC) with the counterparty in Euroclear Italy. 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.
All securities | |
CFCL | CBL may receive counterparty instructions alleged on its account at CEU and will report them to clients provided that the client’s CFCL account is present in the allegement and the allegement subscription is in place on the client account. |
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:
CSD | BIC11 |
Monte Titoli | MOTIITMMXXX |
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.
Counterparty identification | |
CFCL | Home CSD BIC11 and the T2S Party BIC11 of the CSD participant. If a CFCL client uses a BIC8 to identify the Receiving/Delivering Agent, CBL shall be entitled to modify the BIC8 provided, and the settlement instructions will be then processed by default with a BIC11 by adding the default XXX suffix to comply with T2S settlement rules. Accordingly, such clients remain liable for any settlement fails that the use of the BIC8 may cause and the clients furthermore agree to indemnify CFCL against losses, liabilities, damages, penalties, expenses, and all other costs on any kind suffered by CFCL as a result of the client not complying with the above requirement. |
Procedures for domestic counterparties for T2S eligible securities
CFCL
CBL depository – CEU | CBL depository – Monte Titoli | |
Place of settlement | DAKVDEFFXXX | MOTIITMMXXX |
Delivering/Receiving Agent | CEDELULLXXX | CEDELULLXXX |
SAFE of the DEAG/REAG | Not to be instructed. If instructed, it must be the valid CBL SAC: Euroclear Italy: DAKV7201103 | Not to be instructed. If instructed, it must be the valid CBL SAC: Euroclear Italy: SICVCEDELULLXXX000L10 |
Buyer/Seller | BIC11 of the CFCL client | BIC11 of the CFCL client |
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
Place of settlement | DAKVDEFFXXX |
Delivering/Receiving Agent | T2S Party BIC11 CEU participant |
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.
CFCL | Partial Settlement |
As client delivery instructions are always fully provisioned before being sent to the domestic market, no partial settlement can be performed. For receipts, the partial settlement can take place if the counterparty is short of securities and the instructions are received by T2S within the times set above. When CFCL client’s access T2S via CEU, the default set up will be Partial Settlement. Clients that do not wish their transactions to settle partially must provide the No Partial Settlement indicator (NPAR) in their instruction. |
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 Monte Titoli T2S- eligible fund securities.
Back-to-back processing (Transaction linking)
Back-to-back processing is available for transactions in Italian 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).
Settlement Discipline Regime cash penalties
Penalties will be calculated and applied on matched settlement instructions that fail to settle, in full or in part, on and after their intended settlement date (ISD), if both the settlement instruction and the relevant financial instrument are subject to cash penalties.
Instruments subject to cash penalties
Any financial instrument listed in the Financial Instruments Reference Data System (FIRDS) database maintained by ESMA will be subject to cash penalties. However, cash penalties will not apply to shares listed in the Short Selling Regulation (SSR) exemption list.