Australia: Austraclear - Mandatory repurchase format requirements

08.07.2022

Clearstream Banking1 would like to inform customers that further to Announcement A21109 and effective

11 July 2022

customers who perform repurchase agreement (repo) transactions in the Australian market must use the repo SWIFT block (Block D) to provide repo information in the first leg (opening leg) and second leg (closing leg) instructions.

Impact on customers

Customers who have instructed first leg transactions by populating the settlement narrative (:70E:) as outlined in Announcement A21109 prior to this announcement, should continue to instruct in the same format for the second legs.

Going forward, customers are required to instruct two separate instructions corresponding to the first leg and the second leg for Market Repo transactions, using the repo SWIFT block (Block D) to confirm the repo details. The automatic unwind functionality will not apply in this process.

For trade classifications under a repurchase repo, customers must instruct REPU for the first leg and RVPO for the second leg. For a reverse repurchase repo, customers must instruct RVPO for the first leg and REPU for the second leg.

Customers are required to use a unique repo reference indicated in field :20C:://SECO under the repo section, and to ensure the same reference is used for the first and second legs of the instructions. Clearstream Banking has to validate both legs are related to the same repo contract based on the unique repo reference, along with other conditions – for example, trade classification (REPU to match against RVPO, and vice versa), security code must be identical.

For the second leg instruction, customers must use the PREV qualifier to indicate the Sender Reference of the first leg instruction. Upon receipt of the second leg repo instruction, Clearstream Banking will search for the first leg instruction using the Sender Reference indicated under the PREV qualifier, upon successful validation of the repo contract, the instruction will be released to the market.

Customers should refer to the following requirements for more details:

Repo requirements for Xact via SWIFT and Xact File Transfer

Field

Fields to be used

Repo logic

Previous Reference

:20:C::PREV//XXXXXXX

  • This is not required for first leg instruction. However, this will be mandatory for the second leg instruction.
  • Customers need to indicate the Sender’s Reference of the first leg under Previous Reference.

Settlement Transaction Indicator

:22F::SETR//REPU

or

:22F::SETR//RVPO

  • For a REPU trade, REPU (MT543) will be used in the first leg, RVPO (MT541) will be used in the second leg instruction.
  • For a RVPO trade, RVPO (MT541) will be used in the first leg, REPU (MT543) will be used in the second leg instruction.

Term Date

:98A::TERM//YYYYMMDD

Or

:98B::TERM//OPEN

  • If TERM is selected, a date must be indicated.
  • A closing date must be present in the second leg instruction if the first leg is an OPEN term Repo.
  • The TERM date presented in the second leg will supersede the TERM date presented in the first leg and will be taken as final repo term date.

Repo Rate

:92A::REPO//X,XX

  • Mandatory for first leg and second leg instructions.
  • The repo rate presented in the second leg will supersede the repo rate presented in the first leg and will be taken as the final repo rate.

Repo Reference

:20C::SECO//XXXXXXXXX

  • Mandatory for first leg and second leg instructions.
  • This field must be the same for both first leg and second leg instructions.

Termination Transaction Amount

:19A::TRTE//AUDXXXX,XX

  • The amount must be zero for the first leg instruction if it is an Open Term repo. that is, TRTE//AUD0,00
  • The amount presented in the second leg will supersede the amount presented in the first leg and will be taken as the final amount for the second leg.
  • This amount will be the same as the settlement amount (SETT) of the second leg instruction.

Overview of repo requirements for Xact Web Portal

Field

Fields to be used

Repo logic

Previous Reference

Reference Value

  • This is not required for first leg instruction. However, this will be mandatory for the second leg instruction.
  • Customers need to indicate the Sender’s Reference of the first leg under Previous Reference.

Sec. transaction type

Select “REPU – Repurchase Repo”

or

“RVPO – Reverse Repurchase Repo”

  • For a REPU trade, REPU (MT543) will be used in the first leg, RVPO (MT541) will be used in the second leg instruction.
  • For a RVPO trade, RVPO (MT541) will be used in the first leg, REPU (MT543) will be used in the second leg instruction.

Closing Date

Select either “TERM” or “OPEN”

  • If TERM is selected, a date must be indicated.
  • A closing date must be present in the second leg instruction if the first leg is an OPEN term Repo.
  • The TERM date presented in the second leg will supersede the TERM date presented in the first leg and will be taken as final repo term date.

Rate Type

Select “Repurchase Rate”

  • Mandatory for first leg and second leg instructions.
  • The repo rate presented in the second leg will supersede the repo rate presented in the first leg and will be taken as the final repo rate.

Repo Reference

Select “SECO”

  • Mandatory for first leg and second leg instructions.
  • This field must be the same for both first leg and second leg instructions.

Repo Amounts Table - Type

Select “Termination Transaction Amount”

  • The amount must be zero for the first leg instruction if it is an Open Term repo.
  • The amount presented in the second leg will supersede the amount presented in the first leg and will be taken as the final amount for the second leg.
  • This amount will be the same as the settlement amount (SETT) of the second leg instruction.

If the above-mentioned repo requirements are not respected, Clearstream Banking cannot guarantee the timely settlement of customers’ instructions.

Settlement Deadlines

Settlement deadlines remain unchanged. Please refer to the Market Link Guide – Australia for further details

Further information

Bilateral repo transactions that are settled internally within the Clearstream Banking platform are not impacted by this change.

Repo rollover will not be applicable for the repo service.

Repo section (Block D) will not be available in the settlement related reports until further notice.

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

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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.