Partial settlement service for external transactions

17.12.2012

The Partial settlement service for external transactions enables the automatic booking and reporting of partial settlement confirmations received from domestic markets where partial settlement is allowed.

With the implementation of the service, the handling of partial settlement confirmations received from Clearstream Banking's domestic depositories includes:

  • The automatic booking of partial settlements on customers’ accounts; and
  • The reporting of partial settlements to customers (via all communications media), providing a clear view of the status of all trades subject to partial settlement.

The automation of partial settlement means that customers have information about their remaining pending transactions without the need for manual intervention to process partial settlement confirmations received from depositories, cancel instructions and post credits and debits of securities and cash to impacted customer accounts.

Notes:

  • Existing provisioning rules remain in force, such that no partial delivery/receipt instructions are released to domestic markets or apply to Bridge or internal trades.
  • This service, which is freely available, without subscription, to all customers who use CreationOnline, CreationDirect and/or Creation via SWIFT, is offered only on those markets where our depository has confirmed that SWIFT 15022 standard formats are employed to inform Clearstream Banking of partial settlement.
  • The service does not cover back-to-back or repo transactions, which continue to be handled manually.
  • Customers who use the :22F::STCO// Settlement Condition Indicator field of the original instruction to specify whether partial settlement is allowed (PART) or not (NPAR) need make no change to their existing process: whether or not the settlement condition indicator is provided, any subsequently received valid partial settlement confirmation is processed in line with market practice.

Impact on reporting

The reports that reflect the partial settlement service as appropriate are:

  • MT544-7 Settlement Confirmations;
  • MT537 Statement of Pending Transactions;
  • MT548 Status and Processing Advice;
  • MT536 Statement of Transactions.

Report content varies according to whether the instruction is for the first, second/subsequent or final partial settlement of a trade.

Reporting to the customer following a first partial settlement

SequenceTagQualifier//code wordMeaning/content
Settlement Confirmation (SWIFT MT544-7)
A:22F::PARS//PAINConfirmation of partial settlement
C:36B::ESTT//Partially settled quantity
:36B::RSTT//Outstanding quantity
:19A::RSTT//Outstanding amount
E3:19A::ESTT//Partially settled amount
Statement of Pending Transactions (MT537)
B1, C3a:24B::PENx//PARTTrade is settling in partials
B2b, C2:36B::PSTA//Outstanding quantity
:19A::PSTA//Outstanding amount
Settlement Status and Processing Advice (MT548)
A2a:24B::PENx//PARTTrade settled in partials
B:36B::SETT//Outstanding quantity
:19A::SETT//Outstanding amount
Statement of Transactions (MT536)
B1a2:36B::PSTA//Partially settled quantity
:19A::PSTA//Partially settled amount

Reporting to the customer following a second/subsequent partial settlement

SequenceTagQualifier//code wordMeaning/content
Settlement Confirmation (SWIFT MT544-7)
A:22F::PARS//PAINConfirmation of partial settlement
C:36B::ESTT//Partially settled quantity
:36B::RSTT//Outstanding quantity
:36B::PSTT//Previous total settled quantity
:19A::RSTT//Outstanding amount
:19A::PSTT//Previous total settled amount
E3:19A::ESTT//Partially settled amount
Statement of Pending Transactions (MT537)
B1, C3a:24B::PENx//PARTTrade is settling in partials
B2b, C2:36B::PSTA//Outstanding quantity
:19A::PSTA//Outstanding amount
Settlement Status and Processing Advice (MT548)
A2a:24B::PENx//PARTTrade settled in partials
B:36B::SETT//Outstanding quantity
:19A::SETT//Outstanding amount
Statement of Transactions (MT536)
B1a2:36B::PSTA//Partially settled quantity
:19A::PSTA//Partially settled amount

Reporting to the customer following a final partial settlement

SequenceTagQualifier//code wordMeaning/content
Settlement Confirmation (SWIFT MT544-7)
A:22F::PARS//PARCConfirmation of remaining part of partial settlement
C:36B::ESTT//Partially settled quantity
:36B::PSTT//Previous total settled quantity
:19A::PSTT//Previous total settled amount
E3:19A::ESTT//Partially settled amount
Statement of Pending Transactions (MT537)
Not applicable as trade has fully settled
Settlement Status and Processing Advice (MT548)
Not applicable as trade has fully settled
Statement of Transactions (MT536)
B1a2:36B::PSTA//Partially settled quantity
:19A::PSTA//Partially settled amount

Impact on CreationOnline

A transaction that is partially settled is reported as cancelled with Activity “Processing-Cancelled” and Reason Code “Cancelled/replaced due to partial settlement”.

Two new instructions are created with the same customer reference:

  • The first, for the partially settled quantity and amount, with a status “Settled”;
  • The second, for the outstanding quantity and amount, with Activity “External Settlement Pending or Failing” and Reason Code “Partially Settled”.

The outstanding cash amount is taken into account in the Pending - Securities sub-balance for the calculation of the Anticipated Net Balance.