Other services - UK equities, corporate bonds and investment trusts
Securities lending and borrowing
UK Equities, corporate bonds and investment trusts are not eligible for CBL's securities lending and borrowing programme.
Compliance
The U.S.A. asserts jurisdiction over transactions involving securities issued or held for custody in the U.S.A., even where the link between the transaction and the U.S.A. is quite attenuated. Some U.S. economic sanctions laws have extraterritorial effect and others impose or threaten third parties' actions with secondary boycotts, which may affect the third parties' access to U.S. financial or other markets. U.S. financial institutions and, in some cases, their foreign-incorporated subsidiaries and affiliates, are subject to U.S. regulations, even when operating outside the U.S.A. CBL intermediates transactions involving securities in which the U.S.A. is the jurisdiction of issuance or custody. CBL also engages U.S. financial institutions to provide custody, depository and other services in selected non-U.S. jurisdictions based on the quality of the services offered and CBL’s other requirements. Such U.S.-owned or controlled institutions may be required to refuse or even block/freeze transactions directly or indirectly involving parties subject to U.S. economic sanctions regulations, regardless of the law of the jurisdiction in which the U.S. institution operates. CBL conducts its business to comply with all laws applicable to CBL. Accordingly, CBL may not be able to complete or may refuse or block/freeze transactions in or through a CBL account that, in CBL's judgment, may expose CBL to U.S. laws and regulations even where neither CBL nor the customer is directly subject to such laws, but where CBL’s chosen custodian or depository is subject to such laws.
Where a U.S.-linked institution serves as CBL’s custodian or depository, the customer acknowledges and accepts the obligation to comply and ensure compliance by any of the customer’s underlying clients, up to the ultimate [legal and] beneficial owner, with any U.S. law, regulation, sanction, order, judgment, injunction, asset freeze, blocking regulation or order or any other act or action of, or by, any national or foreign government, authority, court, (self-) regulatory organisation, government agency or instrumentality of government, including, but not limited to, investment and holding restrictions (“U.S. Regulations”) applicable to any of the customer, its underlying clients or CBL. The customer shall not hold or seek to hold CBL liable for actions by CBL’s chosen custodian or depository to comply with U.S. Regulations applicable to such custodian or depository. The customer shall not, by action or inaction, cause CBL to violate a U.S. Regulation and shall be liable for and hold CBL harmless against any direct or indirect loss, claim, damage, liability or expense, imposed on or incurred by or asserted against CBL in connection with any actual or alleged non-compliance with the aforesaid by the customer or any underlying client of such customer up to the ultimate [legal and] beneficial owner.
Please also refer to the Resource Center of the U.S. Department of the Treasury.
Disclosure requirements
Please refer to the Clearstream Banking Disclosure Requirements - UK, which is an appendix to the Market Link Guide.
Foreign exchange
Foreign exchange services in GBP are automatically available to customers. To complete foreign exchange conversions for GBP, customers should contact CBL’s Treasury Desk directly via an authenticated communications medium.
Eurex option exercises
CBL enables CBF International (CBFi) customers, acting as Eurex general clearing member (GCM), direct clearing member (DCM) or settlement institution, holding their GBP denominated UK equities and USD denominated ETCs with CBF, to use the holdings to meet settlement delivery obligations in EUI resulting from their activity in Eurex Clearing AG and to receive these from other market participants into their CBFi accounts. This service is not available for 1.5% SDRT accounts.
Settlement services - Securities
Final settlement will take place in the EUI CREST system.
The CREST system has a static data requirement whereby all GCMs and DCMs must supply a CREST clearing member ID. CBL has been granted a CREST clearing member ID, which can be used by customers using the settlement services. Customers who want to use the available CREST clearing ID should consult their Relationship Officer.
Contrary to current practice, customers must monitor any exercise or assignment allocated to them by Eurex and instruct accordingly into their CBFi account.
Settlement services - Cash
There will be no impact on the cash leg of settlement for such exercises/assignments taking place on Eurex designated accounts. All cash movements will take place on the existing cash accounts held by customers. Settlement of such transactions is available via CBL’s link to Citibank N.A. in the standard currencies EUR, GBP and USD.
Stamp Duty Reserve Tax (SDRT)
SDRT, currently charged at 0.5% of the stampable consideration of a transaction, is due on all transactions of chargeable securities. However, in some circumstances, exemption from SDRT or a relief from SDRT can be applied.
Any realignments between customer accounts are to be managed by the customer as well as ensuring that the correct stamp flag is included in the settlement transactions. For example, realignments between customer own 0.5% SDRT accounts and exempt accounts (if exempted for this activity) must be flagged as “NCBO” to avoid undue taxation.
Non-Application for relief from SDRT
If the customer wants to settle exercises and assignments and have SDRT applied to the settlement, settlement must take place on an account operated under the 0.5% SDRT regime; the 1.5% SDRT regime cannot be used for the settlement of such transactions.
Customers holding positions under the 0.5% SDRT regime can use the current process. Customers not yet holding positions in the 0.5% SDRT regime but only in the 1.5% SDRT regime must transfer securities into a 0.5% SDRT designated account in order to meet settlement obligations.
For this purpose, customers must submit to their Relationship Officer a duly completed Account Opening document “Request for Application of the 0.5% SDRT Regime“.
Application for relief from SDRT
If the customer wants to settle exercises and assignments and have full relief applied to the settlement, settlement must take place on an account operated under an exempt regime.
Customers will have to request the opening of a new account, as well as provide proof of their exemption status, and must transfer securities into this account in order to meet settlement obligations.
For this purpose, customers must submit to their Relationship Officer a duly completed Account Opening document “Request for Application of the 0.5% SDRT Regime” (marked as for a Eurex services/exempt account).
In order to enable the efficient processing of Eurex exercises and/or assignments of UK products, customers are required to open one or more designated accounts within CBFi to correspond with the account(s) opened in the CREST system.
General technical specifications
So that EUI’s CREST system can recognise incoming instructions for the Eurex market, certain fields in the instruction are required to contain specific values, as follows:
Connectivity medium/Format Content | Content |
CreationOnline | |
Additional Places: | Type = Place of Trade |
Additional flagging will be required in order to indicate SDRT status for an instruction. | |
Additional Indicators: | Type = Processing Indicator |
For Agency trades, generally, payment of stamp duty is due and the stampable consideration amount must therefore be included in such cases in the Deal price field. | |
For realignments of positions between customer accounts from/to an exempt account to/from their main 0.5% SDRT account to meet settlement obligations and avoid undue charges: | |
Additional Places: | Type = Stamp Duty Indicator |
Xact via SWIFT and Xact File Transfer | |
:94B::TRAD//EXCH/XEUR | Place of transaction segment MIC code provided to indicate that the instruction is for the Eurex market. |
Additional flagging will be required in order to indicate SDRT status for an instruction. | |
:22F::PROC/CRST/Axxx or | - Axxx = Agency Trade |
For Agency trades, generally, payment of stamp duty is due and the stampable consideration amount must therefore be included in such cases in field :19A::DEAL//. | |
For realignments of positions between customer accounts from/to an exempt account to/from their main 0.5% SDRT account to meet settlement obligations and avoid undue charges: | |
:22F::STAM//NCBO | NCBO = No change of beneficial ownership |
Xact Web Portal | |
Place of trade type | Code |
Additional flagging will be required in order to indicate SDRT status for an instruction. | |
Additional Indicators: | Type = Processing Indicator |
For Agency trades, generally, payment of stamp duty is due and the stampable consideration amount must therefore be included in such cases in the Deal price field. | |
For realignments of positions between customer accounts from/to an exempt account to/from their main 0.5% SDRT account to meet settlement obligations and avoid undue charges: | |
Settlement parameters – Stamp duty tax basis | Type = Stamp Duty Indicator |
a. The field must be completed in each case as shown here, including the “xxx” or “xx” (as the case may be) as required static data.
Note on Place of Trade MIC and TSO: Customers should note that the Place of Trade MIC XEUR provided in the settlement instructions will be used in CREST to also populate the TSO (Trade System of Origin) field which is a matching field if provided by both counterparties. Customers are requested to align with their counterparties accordingly to avoid unmatched instructions.
For customers exempted from SDRT
Where a customer obtains relief from SDRT on the settlement of exercises and assignments, CBL will provide the customer with a designated account that corresponds with the segregated account(s) opened in the Citi/CREST system.
This account must be specified as ’/SAFE/xxxxx’ in the narrative field of the instruction (Settlement Processing Narrative in CreationOnline; :70E::SPRO// in SWIFT; settlement transaction conditions in Xact Web Portal).
The account number will be supplied to the customer on completion of the account opening process. The opening of designated accounts in CREST may take between seven and 10 business days.
For information about how to instruct, please refer to the instruction specifications.
Procedures for domestic counterparties
Domestic counterparties must instruct CREST as follows:
| All transactions on a 0.5% SDRT account | All transactions on an exempt account | |
Deliver to: | CBL participant number 00XJJ | CBL participant number nnnnna |
For account of: | Clearstream Banking S.A. | Clearstream Banking S.A. |
In favour of: | Account number of CBL customer | Account number of CBL customer |
a. nnnnn = unique CREST Participant ID provided by the CBFi customer to the counterparty as appropriate.
Tax services
Please refer to the Clearstream Banking UK Tax area.