Settlement fails management: Introduction of the Smart Realignment Service

Clearstream Banking¹ informs clients that effective

December 2025 (date to be defined)

clients can subscribe to Clearstream Banking’s new automated Smart Realignment service (“the service”) to manage settlement fails of securities deliveries.

Becoming even more important under a compressed T+1 cycle², the new service aims to increase settlement efficiency and, may decrease CSDR penalties, by reducing the number of failing delivery instructions due to a lack of securities on or after the intended settlement date. To provision these deliveries, Clearstream Banking will automatically generate realignments from other eligible securities accounts of the subscribing client.

Background

The service considers any fails in securities of the markets being in the scope of the service (“Full scope service”) as a trigger for Clearstream Banking to generate realignment instructions. Alternatively, clients can limit the service to only cover securities delivery fails related to their Eurex “special Repo” trading activity (“Special Scope Service”).

If a relevant settlement fail was detected, a realignment instruction will be generated to transfer an available held-free securities long position from a client’s dedicated source account(s) to the same client’s target account(s) lacking the securities. Source accounts can be with Clearstream Banking AG (CBF) and/or Clearstream Banking S.A. (CBL).

Eligible accounts

Only CBL client securities accounts categorised as own assets and linked to the same legal entity (LEI) are eligible for the service. Special purpose accounts (such as CBL CFF-FIA, collateral pledge accounts or transfer accounts) and client accounts with no LEI assigned are not eligible.

Service scope

Detection of failing securities delivery instructions

Clearstream Banking applies the following rules to identify an instruction subject to the service:

• The instruction is to be settled in one of the markets in scope of the service.
• The security is eligible for settlement in at least one of the markets in scope.
• Any financial instrument type eligible for settlement in Clearstream for a market in scope is part of the service.
• The delivery versus payment or free of payment instruction:
  • is matched and:
    • for CBL-internal, Bridge, CBF/T2S and non-T2S domestic pre-matching markets, it fails due to “LACK“ (lack of securities);
    • for non-T2S domestic markets without pre-matching, it is flagged as "Your Security Provision”;
  • has an Intended Settlement Date (ISD) being older than or the same as the current business day;
  • is not put on hold or otherwise restricted for settlement, that is, the instruction must be eligible for or already be presented to settlement.

The required security quantity to be transferred to the target account is calculated by Clearstream Banking:

• Considering any “held-free” long position on the source account, but
• Ignoring any pending receipt instructions (whether matched or unmatched) on the target account. 

Detection of available securities on the source accounts

• If there are several source accounts holding a held-free position in the required security, Clearstream Banking will first select an account belonging to the same Clearstream CSD entity as the target account.
• If the balances available on the source accounts of the same Clearstream entity are insufficient, transfers will be generated across Clearstream CSDs.
• Multiple realignments from different source accounts and several Clearstream CSDs are possible.
• The realignment instructions generated by Clearstream Banking will be subject to partial settlement by default.

Markets and securities

Settlement fails in securities that are eligible for settlement in Clearstream Banking for the following markets³ are in scope of the service:

• Austria;
• Belgium;
• France (except for registered shares);
• Germany;
• Greece;
• Italy;
• Netherlands;
• Spain;
• Portugal;
• Selected XS/EU ISINs.

Realignment process steps

The detection process for failing delivery instructions in Clearstream Banking is triggered at fixed points in time during the business day:

Settlement cut-off times are considered to ensure that, under normal circumstances, realignments are only triggered when the failing delivery instruction on the target account can still settle after the realignment instruction has been processed.

Reporting

For all realignment instructions, the SWIFT ISO15022 status messages generated by Clearstream Banking through the service, have a transaction reference (“RELA”) consisting of a unique value of 16 characters starting with “REAL” (for example, “20C::RELA//REAL000000044234”).

A common reference (“COMM”) in the format “CREAL” followed by an 11-digit unique number is provided to map the delivery and receipt legs of the realignment transaction (for example, ”20C::COMM//CREAL94625437689”).

The settlement Transaction indicator is “TRAD” (“22F::SETR//TRAD”).

The narrative (“NARR”) contains the term “REAL” plus the full reference of the failing client delivery instruction on the target account (for example, "70E::SPRO//REAL-JR12345678XYZ”).

Special Scope Service

Clearstream Banking clients with Eurex “special Repo” trading activity who wish to limit realignments to this activity can alternatively subscribe to the Special Scope Service. The same service features and conditions apply as for the full scope service, except that only failing securities delivery instructions to specific Eurex accounts as the receiving counterparty are considered as a trigger for the realignment instruction generation process.

The Eurex Clearing AG accounts acting as the Clearstream Banking clients’ counterparty are:

• CBL account 51295;
• CBF account 7525 000;
• Euroclear Bank account 22563.

Further information

More detailed information, including the application forms, will be provided in course of November 2025.

For further information, please contact Clearstream Banking Client Services or your 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, registered office at Mergenthalerallee 61, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500. Clearstream Banking S.A. is registered as an Australian CS (Overseas) Facility, under subsection 824B(2) of the Corporations Act 2001, with registration number ARBN 675 244 783. 

2. For more information, see Journey to T+1.

3. For some markets, restrictions related to the tax certification status of the client accounts involved and according to the reference data maintained in Clearstream Banking’s accounts management systems may apply.