T2S Release: Information on the production launch in November 2024
LuxCSD1 would like to inform customers that effective
18 November 2024
the following change request (CR) will be implemented by T2S.
T2S-0789-URD “Handling automatic cancellation for T2S External Transactions”
With release 4.2 in November 2020, T2S implemented with CR T2S-0691-URD (“Recycling period of 60 business days for matched instructions”) an automatic cancellation of all pending settlement transactions after 60 business days have passed since their Intended Settlement Day (ISD) or the last status change (see Announcement L20039).
The rule also applies to transactions with T2S Out-CSDs, even if those CSDs do not follow the same cancellation rules. In rare cases, this causes reconciliation problems:
- Transactions still pending with the T2S Out-CSD, but already cancelled in T2S, may cause penalties that the affected party cannot assign to a transaction in T2S.
- Transactions settled with the T2S Out-CSD, but already cancelled in T2S, cannot be settled in T2S.
With CR T2S-0789-URD, the automatic cancellation process for matched settlement transactions after 60 business days since the ISD or the last status change, will be adapted to not cancel transactions of T2S Out-CSDs qualified as non-compliant to this rule and being the Issuer CSD of the security concerned.
Currently, LuxCSD settles Eurobonds instructions with CBL. Currently, CBL:
- Offers LuxCSD clients, with the link to CBL via CBF, the opportunity to settle free of payment instructions in selected Eurobonds against CBL and Euroclear (EOC) counterparties (see International).
- Receives a cancellation advice from LuxCSD once T2S has sent a corresponding cancellation message to LuxCSD to announce a T2S automatic cancellation. In these markets, CBL cancels only if confirmed by the affected CBL or CBF-i client.
- Allows matched instructions to settle beyond 60 days of pending on client confirmation.
CBL will be defined as a T2S Out-CSD non-compliant to the T2S rule for a recycling period of 60 business days for matched instructions. Consequently,
- T2S will not automatically cancel after 60 business days pending matched LuxCSD instructions against CBL or EOC counterparties.
- LuxCSD transactions against CBL or EOC counterparties will only be cancelled by T2S upon cancellation requests of both parties involved.
Further information
Particular questions related to the introduction of the recycling period will be routed to the experts of the T2S Settlement Functionality team.
For further information, customers may contact LuxCSD Client Support or their relationship manager.
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1. LuxCSD refers to LuxCSD S.A., registered office at 42, Avenue J.F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B-154.449.