CFCL Settlement – Japan

Settlement process

Please refer to the Settlement process – Japan for the complete information about the Settlement process.

Settlement services

Domestic allegement matching service

Where no pre-matching instruction has been sent to the market, CBL (acting as a sub-custodian for CFCL) accepts allegements via its depository from domestic market counterparties, provided that the client's account number at CFCL is available and been asked by counterparties. It will then use these allegement messages to search for the best matching client instruction.

If no matching client instruction is found, the allegement is reported to the client provided that its Clearstream Fund Centre account number is present.

For details of CFCL's domestic allegement service, see Pre-matching services for external settlement instructions.

Procedures for domestic counterparties

This section describes the procedures for domestic counterparties of the Japanese market.

Allowed countervalue difference

A maximum difference in countervalue of JPY 3,500 is allowed for matching and settlement of against payment transactions with domestic counterparties. In the event of a discrepancy within these limits, the receiving party’s cash amount shall generally prevail.

In addition, there is a market tolerance limit set by JASDEC at JPY100. When pre-matching is conducted by PSMS, settlement amounts will be automatically adjusted up to JPY100 and for that, seller's amount is always prioritised.

Back-to-back processing

Back-to-back processing is available for transactions in all book-entry equities settling in JASDEC. If both the client and the domestic counterparty meet their settlement obligations and fulfil the market's back-to-back requirements within the relevant deadlines, the linked receipt and the linked delivery will settle with same-day value.

Deadlines for the receipt of valid instructions remain unchanged for back-to-back transactions (see Settlement times).

To benefit from this functionality, clients must ensure that their back-to-back transactions are formatted according to the following format, as appropriate:

a. The reference (16x) must neither start nor end with a single slash (/) character nor must it contain two consecutive slash (//) characters.

Clients should also indicate their reference in the narrative field of their settlement instructions (:70E::SPRO// in Swift and File Transfer) by including the text “SAME DAY TURNAROUND RELATED REF xxxxxxxx” on both the receipt and delivery legs of the back-to-back transactions.

Note: Deadlines for the receipt of valid instructions for back-to-back transactions remain unchanged (see Settlement times).

Management of failed instructions

Instructions in the domestic market that remain unmatched by the requested settlement date are reported to CFCL.

Any instruction that reaches the depository after the deadline will be settled with the next possible value in the domestic market with no backvaluation.

Domestic instructions remain in suspense until they settle or until they are cancelled. CFCL reserves the right to cancel an instruction with a domestic counterparty that has not settled by the fifth domestic business day after the day on which the instruction was released to the depository for settlement.

New issues settlement

The earliest transaction settlement in new issues will, when appropriate, take place on listing date in the local market. For confirmation times, please refer to Settlement times.