CFCL Settlement - Canada
Settlement process
Please refer to the Clearstream website for the complete information about the Settlement process.
Settlement services
Pre-matching service
The table below summarises CFCL's pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. For details of CFCL's pre-matching services, see Pre-matching services for external settlement instructions.
Service offered | Method employed | Start (local time) |
Immediate Release Flag available | Automated through the CDS | On receipt of instruction |
Connectivity medium | Instruction format |
CFC Web Portal | Tick to enable the "Immediate Release" option. |
Swift and File Transfer | Field :22F::STCO/CEDE/IREL |
Note: In order to benefit from the early matching status available in the Canadian market and therefore avoid settlement delays, CFCL recommends that clients input instructions on SD-1.
Procedures for domestic counterparties
The details for receipts and deliveries in vary according to whether the securities are eligible in the CDS.
Counterparties must arrange for securities to be received and delivered as follows:
by book-entry from the CDS: | |
CDS transfer to CUID code a: | RBCT (for Royal Bank of Canada) |
Account: | 080000630001 |
Memo line: | /xxxxx b |
by book-entry from the DTC to the CDS (Northbound Flips) - against payment: | |
Deliver to: | DTC 00000901 |
In favour of: | 298301/xxxxx b,c |
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/xxxxx b |
by book-entry from the CDS to the DTC (Southbound Flips) - against payment: | |
Receive from: | DTC 00000901 |
By order of: | 298301/xxxxx b,c |
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/xxxxx b |
a. CUID = CDS participant number.
b. xxxxx = client’s 5-digit CFCL account number.
c. 298301 = Royal Bank of Canada’s account at DTC 00000901.
Allowed countervalue difference
A maximum difference in countervalue of CAD 50 is allowed in transactions with domestic counterparties in the CDS. A maximum difference in countervalue of USD 25 is allowed in transactions with domestic counterparties in the DTC.
The amount indicated by the CFCL client will always prevail. This means that, in the event of a discrepancy within the tolerance, the cash amount credited or debited to the CFCL client will be the one indicated by the CFCL client.
Specific settlement rules / settlement restrictions
CFCL 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 (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.
RBC’s local settlement agent for the U.S. market reserves the right to reject any transactions for which securities are not considered as eligible according to their internal risk policy.
CDS nominal limitation on settlement instructions
The maximum nominal quantity for a debt transaction against payment is 50,000,000 nominal.
RegS/144A CDS-eligible securities
RegS/144A CDS-eligible securities are eligible for settlement in CFCL. On an exceptional basis, the beneficial owner may be requested, by the CDS and/or the issuer, to provide additional documentation for a transfer. This may result in additional out of pocket expenses for CFCL client and settlement delays.
Back-to-back processing
Back-to-back processing is available for transactions in all book-entry securities eligible in the Canadian and U.S. domestic markets. Clients can increase same-day turnaround of instructions by “linking” one domestic receipt to one domestic delivery sale with the same value date.
Note: The linking of transactions does not guarantee settlement. CFCL will bear no responsibility with regard to the failure of a linked transaction. By sending a back-to-back instruction in the Canadian market, the client is deemed to indemnify CFCL from any costs, penalties or loss that may be incurred with regard to such instruction.
The service will be performed on a one-to-one basis, provisioning one domestic sale directly with securities from one domestic purchase. Same-day settlement of both instructions will be achieved provided that both the CFCL client and the domestic counterparty meet their settlement obligations and fulfil the market back-to-back requirements within the relevant deadlines.
Note: The deadlines for the receipt of valid instructions are the same as the standard deadlines.
To benefit from this functionality, customers must ensure that their back-to-back transactions are formatted as follows, according to the connectivity medium used:
Connectivity medium | Pool ID format | Field(s) to be used |
Swift and File Transfer | :POOL//16x a | Field :20C: sequence A1 |
a. The reference (16x) must neither start nor end with a single slash ’/’ nor must it contain two consecutive slashes ’//’.
Note: The narrative field must be left blank.
Management of failed instructions
Deliveries and receipts with counterparties in CDS
Receipt and delivery instructions remain in suspense until they settle or until they are cancelled. CFCL reserves the right to cancel an instruction with a domestic counterparty that has not settled by the 10th domestic business day after the day on which the instruction was released to the depository for settlement.
Deliveries from DTC (Northbound Flips)
Receipt instructions remain in suspense until they settle or until they are cancelled. CFCL reserves the right to cancel an instruction with a domestic counterparty that has not settled by the 30th domestic business day after the day on which the instruction was released to the depository for settlement.
Deliveries to DTC (Southbound Flips)
Delivery instructions remain in suspense until they settle or until they are cancelled. If an instruction settles but is then returned (DK) by the counterparty, CFCL will reverse the transaction in the client’s account. The client that wants to settle such a delivery must therefore re-instruct it.
Treasury shares and Electronic Treasury Orders
Treasury shares are shares that are bought back by the issuing company, reducing the amount of outstanding shares on the market. When shares are repurchased, they may be either cancelled or re-issued. When they are not cancelled, they are referred to as treasury shares.
Treasury shares entail no voting rights and pay no dividends while they remain with the issuer. Once delivered to a buyer, they become fully paid as "normal" shares.
Electronic Treasury Order (ETO) instructions
An Electronic Treasury Order (ETO) is the means whereby treasury shares are purchased directly from the issuer. Clients who want to receive treasury shares in their CFCL account following an ETO must communicate "Electronic Treasury Order" in the narrative field of their receipt instruction.
CFCL will block the securities in the client account until the registration is completed.
There are two types of ETO:
- ETO regular deposit and withdrawal; and
- ETO instant deposit and withdrawal (processed slightly more quickly than an ETO regular deposit).
The client must instruct CFCL within the following deadlines and include information in the narrative field of their settlement instruction (field :70E:: in SWIFT) as indicated:
Type of deposit | Narrative | Deadline |
ETO regular deposit or withdrawal | ETO regular deposit or ETO regular return including complete registration details | 18:00 CET |
ETO instant deposit or withdrawal | ETO instant deposit or ETO instant return including complete registration details | 15:00 CET |
Note: In the Canadian market, a withdrawal of securities is typically referred to as a “return”.
If only "ETO" is entered, the regular instruction option will apply by default.
There is no set process in place regarding the agent fees and fees may vary depending on the agent. The fees charged to CFCL will be passed on to the client.