Announcement

CSD Regulation (CSDR): Unforeseen liquidity shortfall communication

Liquidity Solutions

Reference

Code
A22142
Service level
CBL
Last Updated
04.11.2022
This page contains Governing Information.

The purpose of this document is to outline the communication process applied by Clearstream Banking S.A. (CBL) if confronted with an unforeseen liquidity shortfall as specified in Article 21.4 of the General Terms and Conditions (GTCs).

Triggering events

The triggering events contemplated hereto are unforeseen and potentially uncovered liquidity shortfall events within the meaning of Article 37.1 of Commission Delegated Regulation (EU) 2017/390 of 11 November 2016 with regard to regulatory technical standards on certain prudential requirements for CSDs (EBA RTS 2017/390) or having as a result that CBL is not in position to cover the CBL system’s liquidity needs and execute cash transfer instructions in the requested currency.

Customers can find below some examples of triggers for liquidity stress situations (without limitation):

  • Default of one or more customers, service providers or cash correspondent bank (CCB);
  • Default occurring following the time to perform a collateral call or execute a foreign exchange transaction;
  • Sudden freeze up of the liquidity flows (notably due to a global event like 9/11), as one or more cash clearers are unable to execute any payment requests.

Customer information

Upon identification of the unforeseen liquidity shortfall, CBL will, inter alia, issue a customer announcement (available via the website) explaining in particular that:

  1. Settlement instructions (Internal, Domestic and Bridge) in the impacted currency may be blocked by CBL until the issue is solved;
  2. Cash withdrawals instructions in the impacted currency may be put on hold;
  3. Customers are free to cancel their instructions, and they will be informed of the end of the liquidity shortage.

The settlement instructions will be released upon internal communication by CBL’s crisis coordinators at the end of the liquidity shortage. Another customer announcement will be published to inform the customers accordingly.

Further information

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

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1. Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.