Canada: Settlement service Procedures for domestic counterparties - Reminder

03.08.2021

Clearstream Banking1 would like to remind its customers about settlement standing instruction details for receipts and deliveries that varies according to whether the securities are eligible in the Canadian Central Securities Depository (CDS).

CBL offers settlement, free of and against payment in USD, between Canadian and U.S. counterparties for securities that are eligible in both CDS and DTC, as follows:

  • Settlement free of payment is facilitated through the CDS’s account at the DTC;
  • Settlement against payment in USD is facilitated through RBC’s agent, Bank of New York Mellon (BONY) (DTC 0000901), at the DTC.

In the settlement of cross-border transactions, Northbound Flips are deliveries of securities to Canada and Southbound Flips are deliveries to the U.S.A.

Background

Our local depository in Canada, RBC Investor & Treasury Services (RBC I&TS) has encountered a gradual increase in the volume of Deliver Free/Receive Free instructions though BONY (DTC 0000901) instead of CDS’s account at the DTC.

This is causing additional processing and costs at RBC I&TS to process these flips through BONY. Besides, free of payment security trades flow through BONY are risky as these securities could be used to settle a DVP/RVP trade in error. 

Impact on customers

CBL participants are requested to review the format of instructions for domestic and cross border settlement directly with their local counterparties. They must arrange for securities to be received and delivered as follows:

By book-entry from the DTC to the CDS (Northbound Flips) - Against payment:

Deliver to:

DTC 00000901

In favour of:

298301/xxxxxbc

By book-entry from the DTC to the CDS (Northbound Flips) - Free of payment:

Deliver to:

DTC 00005099

Using CUID code:

RBCT (for Royal Bank of Canada)

In favour of:

080000630001/xxxxxb

By book-entry from the CDS to the DTC (Southbound Flips) - Against payment:

Receive from:

DTC 00000901

By order of:

298301/xxxxxbc

By book-entry from the CDS to the DTC (Southbound Flips) - Free of payment:

Receive from:

DTC 00006000

Using CUID code:

RBCT (for Royal Bank of Canada)

By order of:

080000630001/xxxxxb

a. CUID = CDS participant number.
b. xxxxx = customer’s 5-digit CBL account number.
c. 298301 = Royal Bank of Canada’s account at DTC 00000901.

Further information

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

-------------------------------

1. Clearstream Banking refers collectively to 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, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.