T2S and CBF Releases: Information on the production launch in June 2023 – Update
Note: This Announcement, originally published on 19 April 2023 and updated on 5 June 2023, has been supplemented by an example for the CBF scope enhancement. Changes have been highlighted.
Clearstream Banking AG, Frankfurt1 informs clients about the upcoming releases in June 2023. Along with the implementation of TARGET2-Securities (T2S), CBF will introduce functional modifications. According to the T2S Release Concept, the release will be deployed on
the weekend 10 and 11 June 2023
for business day, Monday, 12 June 2023
T2S Release in June 2023 – Scope
With the T2S Release in June 2023, 14 Change Requests (CRs) will be introduced in production. They have already been approved at T2S Steering Level. In the event of urgency and if priority is given, further functional updates might be authorised by the Operational Managers Group (OMG). If such changes are announced by T2S, CBF will inform clients in due time.
With this Announcement, CBF informs clients about the scope elements for T2S Release in 2023 and indicates if the modification might have impact on CBF clients acting in ICP and / or DCP mode:
- Overview T2S Change Requests
The “T2S Release R2023.JUN - CRs” report attached provides an overview of the CRs. More details on these requirements can be found in the related ECB documentation2. - Problem Tickets (PBIs)
CBF regularly reviews the lists of pending PBIs provided by T2S. The analysis of the list published mid-May 2023 shows that currently four T2S Problem Tickets (PBIs) that may have an impact on clients acting in DCP mode. One of these PBIs is relevant for clients acting in ICP mode. The assessment result is included in the second list attached. - Transition plan
The installation of T2S Release into production is planned for the second weekend in June 2023. The deployment will be executed via the “Release Weekend Schedule”. In line with the deployment approach of previous T2S Releases, the schedule of the T2S Operational Day will be modified due to the implementation activities. The deployment will start once the end of day procedure (“T2S End of Day”) on Friday, 9 June 2023, has been completed. CBF has provided an indicative timeline for changes in the operational day during the deployment weekend (Announcement D23016).
CBF enhancements for the T2S Release in June 2023
CBF aims to mitigate the impact on clients operating in ICP mode as much as possible. Functional enhancements delivered by T2S will be included in CBF's scope of services. CBF will adapt functionalities and the automated connectivity channels (Swift, MQ or File Transfer (FT)) according to the future service level.
T2S CRs requiring software adaptions in CBF
Based on the analysis of the T2S Change Request documentation provided by T2S, the adjustments that will be effective for clients in ICP mode will be implemented by CBF without any impact on clients.
T2S CRs with potential client impact
The following CRs complement the current scope of services and will be available to CBF clients after the implementation of T2S Release R2023 JUN. These changes do not require any software modifications in CBF's client-facing systems. However, CBF recommends clients to review the changes for any necessary adjustments in their operational procedures.
T2S-0638-SYS “T2S should allow and process already matched instructions which include the counterparty’s securities sub-position to be used for settlement purposes”
With the implementation of the June 2023 release, T2S will introduce the possibility to show in already-matched instructions the sub-balance type for both the instructing as well as for the counterparty. Currently, the sub-balance type for the counterparty’s position is supposed to be “AWAS” (available position). The new functionality can be used by CSDs, CCPs and trading platforms, which have received an instruction from its members to use a sub-balance type other than “AWAS” in the already matched on-behalf instructions.
With this update, clients acting in DCP mode will not receive any longer Intra-Position Movements messages (semt.014 and semt.015) for the following instruction types resulting from semt.013 generated by the system out of the CASCADE Registered Shares (RS) processing when the following instruction types were used:
- AA01 B = External account transfer on non-earmarked accounts
(RS Position transfer for de-registration except withdrawal, which can be instructed in ICP mode only); and - AA01 P = De-registration on earmarked accounts
(RS Account transfer which can be initiated in ICP and DCP mode).
For all other business processes related to CASCADE-RS, clients will continue to receive semt.014 and semt.015 messages based on semt.013.
T2S-0740-SYS “No check of the Minimum Settlement Unit upon revalidation of partially settled instructions and partially settled settlement restrictions”
The Minimum Settlement Unit (MSU) of an ISIN to be partially settled in T2S applies for the first partial settlement. After the first partial settlement, the settlement instruction can partially settle in quantities lower than the MSU considering the relevant threshold to be equal to the settlement unit multiple.
The current start-of-day revalidation in T2S implies that such a partially settled instruction is not able to fully settle.
This CR aims to ensure that the agreed quantity between the settlement participants is able to settle with the MSU validation only to apply before the first partial settlement occurs in the instruction. After the first partial settlement, no automatic cancellation of a remaining quantity lower than the MSU should take place.
T2S-0761-SYS “Enhance optimisation during RTS to maximise transaction throughput on the same resource”
In the context of the upcoming migration of Euroclear Finland (EFi) to T2S, the T2S settlement process shall be enhanced by removing transactions with no chance of success in real-time settlement (RTS) optimisation processes. Moreover, the throughput in the validation and booking process shall be increased. Both enhancements aim to improve of the RTS settlement processing for massive volumes.
T2S-0762-URD “New option for opening T2S during the week-end”
To enable the selective processing of large volumes without interfering with regular night-time processing (NTS), a new NTS process will be introduced that can be scheduled at weekends. This procedure will only be applied upon request as part of an agreed operational procedure (MOP). These transactions named "NTS Late Peak Volumes (NLPV)" will be executed after the regular NTS. In addition, these transactions require predefined settings (for example, "Already Matched", "Intraday Restriction"), which enable a separation of the regular NTP processing.
T2S-0763-SYS “T2S Multi-Criteria Settlement Optimisation”
In order to process high volumes, T2S will introduce a new prioritisation in the selection of instructions to be settled first. Under the new implementation, for any (priority, age) level an optimisation attempt is executed considering all transactions from higher, current, and lower (priority, age) levels.
T2S-0764-SYS “No intraday update of the Negative Position flag”
The purpose of this enhancement is to prevent an update in static data for the attribute "Negative Position" from having an impact on intraday settlement in T2S. This means that if an update request for this attribute is received during business hours, the change may only be made in the end-of-day period (EoD) and the new value can be considered for the next business day.
For CBF clients, nothing changes from the current process. Currently, CBF ensures that updates are made in a timely manner using its own software.
T2S-787-URD “Instructions released during cut-off with failing reason ‘CYCL’ must be imposed with a SEFP penalty”
To determine whether a settlement instruction is eligible for a Settlement Fail Penalty (“SEFP”) or not, T2S retrieves all the matched instructions which failed to settle at the end of the relevant business day´s cut-off and analyses the reason(s) for failing.
Currently, the reason for failing “Awaiting Next Settlement Cycle (CYCL)” is not eligible for a penalty.
When a T2S actor sends a release request over a settlement instruction close to or during a cut-off of its intended settlement day (ISD), T2S proceeds to execute the release no matter if the settlement instruction can still be submitted to a settlement attempt or not.
If same-day settlement is subsequently not possible, both settlement instructions receive a settlement status advice ‘failing’ and reason code “CYCL”.
As a result, no “SEFP” is imposed for any of those settlement instructions which is not correct as these settlement instructions could not settle on their intended settlement day. In future, instructions released shortly before cut-off will be subject to “SEFP” even if they show reason code “CYCL”.
CASCADE Online functionality (HOST / PC): Decommissioning of LION
Following the successful implementation of the project Stock Exchange Transactions Go OTC (SET-GO) in July 2022, the release in June 2023 will deploy further system-side activities for the decommission of the previous stock exchange transaction processing (LION).
CBF will remove the menus and displays from the CASCADE Online functionality (HOST / PC) that were previously available for the settlement of LION instructions (AA10) and currently with no function, and thus adapt the interfaces accordingly.
CASCADE-PC update
Rollout activities for the CASCADE-PC version 10.4 will be necessary for the adaptations of the CASCADE GUI regarding the decommissioning of LION with the release in June 2023. The screenshot below shows the layout of the updated menu:
The mandatory software update has been scheduled, that is, all earlier versions of CASCADE-PC cannot be used after the successful deployment of the CBF Release in June 2023. Starting from 12 June 2023, clients who log on with CASCADE-PC version 10.3 will receive the following error message:
E00060: your currently installed program version is 10.3,
but you need version: 10.4. Terminate this application.
CASCADE-PC version 10.4 is available for download on the Clearstream website.
Enhancements to the scope of CBF services for corporate actions
Payment Free of Delivery (PFoD) instructions are broadly used in T2S for the settlement of market claims and transformations in cash relating to income events such as dividends and interest or redemption payments. They are supported in intra-CSD and cross-CSD settlement flows.
However, PFoD instructions were not supported in external-CSD settlement flows by T2S. This was changed by the implementation of Change Request 742 with T2S Release 6.0, which introduced PFoD market claims and tranformations in cash in T2S even if one of the parties is located in an external CSD.
Based on this new T2S functionality, CBF will introduce with CBF Release in June 2023 the PFoD settlement of market claims and transformations in cash generated on transactions in Eurobonds between Clearstream Banking AG (CBF) and the T2S external CSD Clearstream Banking S.A. (CBL) clients. The proceeds will be debited or credited to the DCA of the originating CBF account as follows:
| PFoD market claim for an underlying Eurobond transaction between a CBF (9999) and a CBL (69999) client (MT545 or MT547) |
:16R: GENL :20C: :SEME//C35F112954BA038T :23G: NEWM :98C: :PREP//YYYYMMDD123456 :16R: LINK :13B: :LINK/DAKV/DAKVDEFFXXX :20C: :RELA//CSTDY00012345600 :16S: LINK :16R: LINK :20C: :TRRF//KT99990123456789 :16S: LINK :16R: LINK :20C: :COMM//XXXXXXXXXXXX :16S: LINK :16R: LINK :20C: :CORP//0000000123456789 :16S: LINK :16R: LINK :20C: :MITI//YYMMDD1234567899 :16S: LINK :16R: LINK :13B: :LINK/DAKV/DAKVDEFFXXX :20C: :PCTI//CSTDY00012345600 :16S: LINK :16S: GENL :16R: TRADDET :98C: :ESET//YYYYMMDD123456 :98A: :TRAD//YYYYMMDD :35B: ISIN XS0123456789 EXAMPLE AG 16/26 MTN 07OKT 1, :70E: :SPRO//INTRCOMP XS0123456789 DDMMYY OIE QTY 99.000 TR 07623IRL00063231 CP 69999 :16S: TRADDET :16R: FIAC :36B: :ESTT//FAMT/0, :36B: :PSTT//FAMT/0, :36B: :RSTT//FAMT/0, :19A: :PSTT//EUR0, :19A: :RSTT//EUR0, :97A: :SAFE//99990000 :97A: :CASH//CDEEURXXXXDEFFXXX :16S: FIAC :16R: SETDET :22F: :STCO//NPAR :22F: :SETR//CLAI :16R: SETPRTY :95P: :DEAG//XXXXDEFFXXX :97A: :SAFE//99990000 :16S: SETPRTY :16R: SETPRTY :95P: :PSET//DAKVDEFFXXX :16S: SETPRTY :16R: SETPRTY :95P: :REAG//CEDELULLCPI :97A: :SAFE//44960000 :20C: :PROC//KT44960200416080 :16S: SETPRTY :16R: SETPRTY :95P: :BUYR//XXXXDEFFXXX :97A: :SAFE//69999 :70E: :DECL///ISST N/STBL N/ISTR CLAI :16S: SETPRTY :16R: AMT :19A: :ESTT//EUR999, :16S: AMT :16S: SETDET |
More details can be found in the CBL announcemnts C22010 and C22034, as well as in the LuxCSD announcement L22032.
Client simulation
In the light of the service update in the CBF functionality, clients may decide to enter regression test cases in the CBF Client Simulation environment (IMS23). The already established static data for CBF accounts and the related connectivity settings in IMS23 remain unchanged.
A dedicated webpage provides information on the availability of the CBF client simulation environment.
Contact
For further information, clients may contact Clearstream Banking Client Services or their Relationship Officer. Questions related to the technical connection can be addressed to Connectivity Support. Particular questions related to the production launch in June 2023 will be routed to the experts of the T2S Release Management.
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1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.
2. Details about the scope elements of T2S Release R2023.JUN are published on the ECB’s website.