Spain: First phase of market Reforma: End of temporary support on format for Bilateral Ancillary Transactions
Effective
22 January 2017
the temporary support offered for Bilateral Ancillary Transaction, described in Announcement A16064, dated 29 April 2016, will be decommissioned.
Background information
In May 2016, the first phase of the Spanish market Reforma introduced a new type of transaction called “Ancillary” trade. The bilateral Ancillary method is used when the financial intermediary (broker) settling the order does not know the details of the final distribution between the holders to whom they provide the brokerage service.
As described in Announcement A16064, specific formats apply to bilateral “Ancillary” transactions. Unless properly formatted with field :95P::DEAG/REAG and :97A::SAFE, or :70E::SPRO//AOUX, the Ancillary instruction will be processed as a “Traspaso” transaction instead.
Unlike “Ancillary” trades, “Traspaso” do not imply trading in the market, but just a receipt or delivery, from one custodian to another. The “Traspaso” trades can only settle without change of beneficial owner. In cases there is a change of beneficial owner, a re-registration process (put-through) will be needed.
To support Clearstream Banking1 customers during the implementation of these changes, Clearstream Banking’s agent has been repairing all transactions received as “Traspaso” into “Ancillary” whenever those involved a Special Financial Intermediaries (SFI) that could be identified as belonging to brokers settling trades via a financial intermediary account, that is, via an Ancillary transaction. This procedure was meant to be temporary, aimed at supporting customers during the transition period to phase one of the market Reform.
List of BICs/NIFs that were identified as belonging to brokers settling via “Ancillary” trades:
- ISNTGB2LXXX
- SBILGB2LXXX
- BARCGB33XXX
- ROYCGB22XXX
- DEUTGB22EEQ
- DEUTDEFFXXX
- NWSCUS33XXX
- SOGEGB22XXX
- JBBRFRPPXXX
- NEFOSESSXXX
- PAREFRPPXXX
- BBVAESMMXXX
- A48265169
- A79204319
Impact on customers
As from 22 January 2017 onward the above described repair of the “Traspaso” instructions into “Ancillary” instructions will no longer be supported.
Customers of Clearstream Banking whose financial intermediary chooses to execute the transactions as an “Ancillary” transaction type must instruct accordingly and advise that the trade is an “Ancillary” transaction through one of the following two options:
Option 1:
:95P::DEAG//REAG - Counterparty’s BIC
:97A::SAFE// - 35 digit account of the Financial Intermediary (Broker)
Option 2:
:70E::SPRO//OAUX
If neither of these options are applied, the market will consider the trade as a “Traspaso”.
Clearstream Banking would like to highlight that both counterparties must align on their instruction formats, whether “Ancillary” or “Traspaso”, otherwise the instruction will not settle. In order to avoid settlement delay Clearstream highly recommends customers to align with their counterparts on the type of transactions to instruct.
Further information
For further information, customers may contact Client Services or their Relationship Officer.
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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.