T2S: Introduction of Danish Kroner as settlement currency – Migration weekend
In Announcement D18033, Clearstream Banking AG, Frankfurt1 informed customers that VP Securities will offer settlement in Danish Kroner (DKK) in TARGET2-Securities (T2S) from T2S Settlement Day
Monday, 29 October 2018.
The ECB has developed a migration plan for the introduction of the DKK on T2S. The migration weekend starts on Friday, 26 October 2018 at 18:55 and ends on Saturday, 27 October 2018 at 12:15 according to latest planning.
Migration weekend - Overview
The Danish Kroner will be introduced on T2S using a dedicated process exclusively for this migration. The below timetable indicates the changes in the CBF operational schedule during the T2S Migration Weekend. The plan covers the period from Friday, 26 October 2018, 18:55, to Monday, 29 October 2018, 05:00. Events and processes before and after this specific period can be considered as unchanged.
Migration schedule / activities | Start | Finish | Further details |
Closing settlement day | According to T2S schedule | T2S and CBF will close the business day using the regular procedures. | |
Green Light for MIWE | FRI, 18:55 | Green Light to start migration activities that confirms that the T2S Migration Weekend tasks will be conducted. | |
Change of business day | FRI, 18:55 | FRI, 19:10 | T2S plans to complete the start of the upcoming business day delayed. The regular time is at around 18:45, after the receipt of the T2S message “camt.019” related to the “Start of Day Period (SODP)”. |
Point of No Return | FRI, 23:15 | CBF will publish an alert to communicate the “Go” or “No-Go” decision. | |
Night Time Settlement | FRI, 23:15 | SAT, 07:50 | On Friday evening, CBF will provide all settlement reports according to the existing transmission times. The CBF environment will be closed during the weekend. The processing of the T2S settlement results will start on Monday, 29 October 2018 at around 00:45:
|
Night Time Settlement | SAT, 08:50 | SAT, 10:00 | |
Real-time Settlement | SAT, 10:15 | SAT, 12:15 | |
T2S Maintenance Window | SAT, 12:15 | MON, 05:00 | |
Table 1 – Migration schedule / activities
Potential customer impact
The following sections provide an overview of securities settlement processes that may be affected by the introduction of Danish Kroner on T2S. The migration activities may affect both the functional and organisational processes of CBF customers. Therefore, customers are asked to evaluate these modifications for the T2S Migration Weekend.
Instruction management
During the migration weekend, customers acting in ICP mode need to consider that any instruction transmitted between the start of the migration activities on Friday, 26 October 2018, 18:55, and Monday, 29 October 2018, at around 00:45, will be queued in the CBF backend. Only customers transmitting instructions via SWIFT will receive the related acknowledgement upon receipt of the instruction.
The successful migration of the Danish Kroner has no impact on instruction management with CBF. CBF continues to operate the cross-border link to VP Securities with its current service offering. This means that the set up for Free of Payment (FoP) and Delivery versus Payment (DvP) in Euro instructions remains at T2S. DvP instructions in DKK transmitted to T2S by CBF customers acting in DCP mode will be rejected by the platform:
Error code | Error message |
MVCA514 | If the Credited T2S Dedicated Cash Account is not specified in an unmatched Settlement Instruction crediting cash, there has to be in T2S a default Cash Account for the Currency of the cash leg of the Instruction. |
MVCA515 | If the Debited T2S Dedicated Cash Account is not specified in an unmatched Settlement Instruction debiting cash, there has to be a default Cash Account for the Currency of the cash leg specified in the Instruction. |
MVCA509 | The Credited T2S Dedicated Cash Account is not associated with the Securities Account on the Settlement Date. |
MVCA510 | The Debited T2S Dedicated Cash Account is not associated to the Securities Account stated in the Instruction on the Settlement Date. |
Table 2 – T2S Error codes
If a DvP instruction in DKK is transmitted to a CBF customer by a counterparty having a T2S Securities Account (SAC) linked to a Dedicated Cash Account (DCA) in DKK, T2S will accept this instruction. Allegement reporting cannot be made available to CBF customers, because CBF does not support DKK on T2S.
Settlement Reporting
During the migration weekend, CBF's systems and applications will be closed for the instruction management with T2S. The processing of instructions that are not relevant for T2S (for example the settlement of stock exchange transactions in Non-Collective Safe Custody securities (NCSC)) is performed with the regular process steps and the related reporting is provided at the usual times.
The processing of settlement results generated by T2S in the period from Friday, 26 October 2018, at around 23:15 until the end of the migration on Saturday, 27 October 2018 at 12:15 will be processed by CBF until Monday, 29 October 2018, 01:30. From this time on, settlement reporting that is created in real-time mode can be made available to customers. The related messages (MT54x) are transmitted as usual via all automated connectivity channels (SWIFT, MQ and File Transfer).
Customers who subscribed to the batch-based settlement reporting (MT536, MT537, MT587) will receive the related messages based on the existing message configuration at the times defined in CBF Connectivity Handbook Part 1 (see section “Transmission times”). Time-triggered reporting may also generate "empty reports" if this report configuration has been ordered via CBF by the customer. If this option is not defined in the setup, no file will be generated.
If customers subscribed to the print version of Settlement Reporting, the contents of these print files are also affected and may not show any data.
CBF asks customers to evaluate their processes with regard to
- the processing of empty files;
- the processing of not delivered files;
- the size of files and the increased volume of messages and;
- the late receipt of settlement results from the T2S settlement cycles (Night Time Settlement Cycle 1 and Last Cycle, Real-time Settlement (preliminary)) for the business day, Monday, 29 October 2018;
and also to coordinate them with their responsible data centre. If the settlement results cannot be handled by the usual processing times in the institutions, the affected operational areas should be informed. For example, a delay in reporting can have an impact on fails management, liquidity management or risk assessment.
All T2S processing results can be retrieved via the CASCADE Online Functionality (HOST / PC). In addition to the customer's existing internal systems, this online service may be used.
Transmission times
Excerpt from ”CBF Connectivity Handbook Part 1”:
SWIFT message type
| Data transfer times and acceptance deadlines | ||
SWIFT and MQ | File Transfer | ||
MT536 Clearing & Settlement Statement |
|
| |
MT537 Statement of Pending Transactions | OTC transactions | At 23:00 and 02:00 (Night-time), At 05:00, 06:00, 07:30, 08:00, 09:00, at around 10:30, 11:15, 12:00 , 12:45, 13:30, 15:30, 16:00, 17:00, at around 18:30 | |
Stock Exchange trades | At 10:30, 13:30, 23:00; 23:45 as complete report three times a day. | ||
MT586 Statement of settlement allegement |
| Information about the lifecycle of an instruction is sent to customers in real-time. | At 05:00, 06:00, 07:30, 08:00, 09:00, 10:30, 11:15, 12:00, 12:45, 13:30, 15:30, 16:00, 17:00, 18:00, 19:45, at 23:00 and 02:00 (Night-time). |
Table 3 – Data transfer times
Contact
For further information customers may contact Clearstream Banking Client Services or their Relationship Officer. Particular questions related to this Announcement will be routed to the experts of the T2S Settlement Functionality team.
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1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.