New service to recycle instructions in ISINs not yet opened, and reporting enhancement
Effective
15 October 2012
we will introduce a new service to enable the recycling of MT54x1 settlement instructions that we receive in securities whose ISIN is not yet set up in our database. To complement this new service, the quality of the MT548 Settlement Status and Processing Advice reporting for such instructions has also been improved.
This new service and the reporting enhancement will be available free to all Clearstream Banking2 customers only and across all CreationConnect reporting media3.
Background
Currently, when we receive a settlement instruction in a security whose code is not yet open in our database, the instruction remains pending (while the code’s acceptance is being investigated) and is not forwarded for further processing until the end of Real Time Processing (RTP) on the day the instruction was received (“receipt date”).
- If the code is opened before the end of RTP on receipt date, then the instruction is accepted for processing.
- If the code cannot be opened by the end of RTP on receipt date, the instruction is cancelled and must be re-input by customer.
To avoid the automatic cancellation of an instruction in securities whose code is, at the end of RTP on receipt date, not yet open in our database, customers who subscribe to the new service will be able to recycle the instruction while the eligibility of the code is investigated.
The period in which the settlement instruction will be recycled (“recycling period”) is until the instruction’s requested settlement date or four business days, inclusive of receipt date, whichever is later.
Impact on customers
The new service
This new service is free of charge and, to subscribe, customers must complete and sign the subscription form4 and return it to the address indicated on the form. The customer can request the subsequent addition or removal of accounts from the service via MT599 free-format message.
Instructions entered by subscribing customers in a security whose code is not yet open in our database will be reported as follows:
- Upon receipt of the customer’s instruction, an MT548 will be released with Status, Reason and Reason Narrative fields set as follows:
:25D::IPRC//PACK
:24B::PACK//NARR
:70D::REAS//“Security code not yet open in Clearstream or LuxCSD. Instruction to be recycled.” - If, after investigation, the code is deemed not eligible in Clearstream Banking or LuxCSD, an IPRC//CAND MT548 will be reported with the reason for the ineligibility.
- If, at the end of the recycling period, the code has not been opened, an MT548 is sent with Status, Reason and Reason Narrative fields set as follows:
:25D::IPRC//REJT
:24B::REJT//DSEC
:70D::REAS//"A/M security code is not open in LuxCSD or Clearstream Banking." - If the code is opened during the recycling period, the instruction is sent for further processing and the usual life-cycle Status and Reason information will be provided accordingly. (Please refer to Appendix A to our Creation via SWIFT User Guide.)
The reporting enhancement
In addition to introducing the new service, we have enhanced our MT548 Settlement Status and Processing Advice by including more detailed narrative in cancellation messages for instructions whose security code could not be opened.
Upon receipt of a settlement instruction containing a security code not yet open in our database, an automatic MT548 will be released with Status, Reason and Reason Narrative fields set as follows:
:25D::IPRC//PACK
:24B::PACK//NARR
:70D::REAS//“Security code not yet open in Clearstream or LuxCSD.”
or, for subscribing customers:
:70D::REAS//“Security code not yet open in Clearstream or LuxCSD. Instruction to be recycled."
As soon as the eligibility investigation is complete and if the security code cannot be accepted in our database, an automatic MT548 will be sent, with the Reason Narrative appropriate to the scenario, as follows:
- For security codes that are valid but not eligible in Clearstream:
:25D::IPRC//CAND
:24B::CAND//NARR
:70D::REAS//“Security code not eligible in Clearstream or LuxCSD.” - For instructions submitted with an invalid combination of Place of Safekeeping, Place of Settlement and ISIN (for example, for any instruction against payment sent for a Eurobond with a domestic Place of Settlement):
:25D::IPRC//CAND
:24B::CAND//NARR
:70D::REAS//“Instruction type is not authorised for the depository.” - For all other cases where code eligibility has to be investigated:
:25D::IPRC//CAND
:24B::CAND//NARR
:70D::REAS//“ISIN is not yet accepted in Clearstream or LuxCSD.”
Whenever required, free-format text will be included in the narrative to provide more information to clarify why a security code cannot be accepted.
For all other reports (for example, MT537 Statement of Pending Transactions) and report formats (XML, PDF and ISO), the same reasons will be reported in the respective fields as any other reason codes linked to the MT548.
In CreationOnline, recycled/cancelled instructions in securities not yet open will be found via the Dashboard under status “Incomplete” or via a query under Securities Post Release/activity status “processing-accepted”.
Further information
For further information, customers may contact Clearstream Banking Customer Service or their Relationship Officer.
1. MT540, MT541, MT542 and MT543 delivery/receipt instructions, free of and against payment.
2. Clearstream Banking refers to Clearstream Banking, société anonyme, registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).
3. CreationOnline, Creation via SWIFT and CreationDirect via Internet.
4. A version of the form is attached to this Announceemnt and is generally available from the Information Centre / Settlement page.
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