German debt cleared by LCH SA: New ICSD settlement service
Clearstream Banking1 is pleased to announce its new Settlement Agent Service for German government securities cleared by LCH SA. This solution will allow customers to settle all their cleared transactions on their CBL account from
17 May 2017
This new settlement service extends the choice for Clearstream Banking customers to settle such transactions in either central bank money in a CBF account (a setup which already exists) or in commercial bank money in a CBL account (new setup).
It follows the LCH Group’s recent decision to extend its RepoClear service to offer clearing for cash and repo trades on German government securities via its Paris-based entity, LCH SA, in parallel to the existing RepoClear service of its London-based entity, LCH Ltd.
Operational overview of new settlement service
No settlement instruction will be required from the customer, as LCH SA will instruct in TARGET2-Securities (T2S) (not in CBL) on behalf of the clearing member firm with information about the customer’s CBL account in its instruction.
Clearstream Banking will act as a Settlement Agent on behalf of the customer to process the settlement instructions on the customer’s CBL account.
Please find an overview of the process as follows:
- LCH SA will instruct with status “on hold” and “modifiable“ on the CBL omnibus account in CBF (through a POA).
- The transaction will be replicated on the customer’s CBL account. This transaction will be included in the standard reporting.
- Upon successful provisioning on the customer’s account, Clearstream will release the instruction in T2S to allow the settlement.
- Once settlement is confirmed in T2S, Clearstream will send a settlement confirmation to the customer.
To sign up to the new service, the Clearstream customer must sign a dedicated Settlement Agent Service Agreement, which will be provided upon request.
Next steps
Clearstream will deliver the service on 17 May 2017, with external testing available for customers from 9 May 2017.
Further information
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
------------------------------------------
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 (for Clearstream Banking Frankfurt (CBF) customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.