Settlement services - UK debt securities
Pre-matching service (for deliveries only)
The table below summarises CBL's pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. For details of CBL's pre-matching services, see Pre-matching services for external settlement instructions.
| Service offered | Method employed | Start (local time) |
| Bulldogs and UK Gilts | ||
Release of pre-matching instruction followed by a settlement instruction | Automated through CREST | On receipt of instructions |
Procedures for domestic counterparties
| Procedure for the domestic counterparty | Deadline |
| Receipt in CBL | |
Counterparty in CREST must release delivery instructions from their relevant Participant ID to CBL’s “CEDEL” Participant ID. | Market deadline |
| Delivery from CBL | |
Delivery in CBL Counterparties in CREST must input receipt instructions from CBL’s Participant ID to their relevant designated account. | Market deadline |
Allowed countervalue difference
A maximum difference of GBP 10 or EUR 15 is allowed for external transactions with domestic counterparties. In the case of a discrepancy within this limit, the amount of the deliverer will prevail.
Specific settlement rules/settlement restrictions
Transactions with counterparties in CREST can be settled on an against payment basis in GBP or EUR, irrespective of the denomination currency of the security.
Note: Instructions with EUR countervalue can settle on all TARGET business days; instructions with GBP countervalue can settle on UK market business days only.
Mandatory transaction data
As per CREST transaction data requirements, customers’ instructions must include the following fields in their settlement instructions:
- Trade date;
- Place of trade Market Identifier Code (MIC);
- Type of transaction.
Trade date
The trade date is mandatory in all instructions as well as matching criteria. Instructions received without a trade date are rejected. Furthermore, if the transaction is to settle, instructions of both counterparties must include an identical trade date.
Trade price
Trade price is an optional field in CREST. Deal or Trade Price should be input by those customers for whom completion is necessary to satisfy regulatory reporting requirements; it need not be input by members who are not obliged to satisfy these requirements.
The number of decimal places input should correspond to the price at which the trade was struck; for example:
- If the trade was struck in 16ths, the price would be input to four decimal places.
- If the trade was struck in 32nds, the price would be input to five decimal places.
A maximum of six decimal places will be accepted by CBL.
The price should exclude commission but include any “turn” or “brokerage” fee.
Unlike other optional matching fields, the trade price must match exactly only if entered by both counterparties. If it is entered by one counterparty and not by the other, the instruction can still match.
CSDR type of trade
Type of trade is mandatory field in CREST. If the fields are omitted where required or a value is not recognised by the CREST system, the instructions will be rejected by CREST.
To ensure accurate value is included in the instruction, the customer must complete fields as follows:
Type of transaction | ||
Connectivity medium | Field to be used | Remarks |
Xact via SWIFT and Xact File Transfer | 22F::STCO//CRST/XXXXa OR :22F::SETR//XXXX | XXXX being the code for the type of transaction (for example, TRAD, SECB, SECL) |
Xact Web Portal | Sec. transaction type | Identification of the type of transaction as appropriate (for example, TRAD - Trade, SECB - Securities Borrowing, SECL - Securities Lending) |
a. Customers are recommended to use field :22F::STCO//CRST to populate the appropriate type of trade value. in case customer instructions are missing field 22F::STCO, CBL will derive the value from the field :22F::SETR in the customer instruction.
Place of trade
The MIC to indicate the place of trade (segment MIC corresponding to the stock exchange or off-market where trade is concluded) is mandatory field in CREST. If the field are omitted where required or a value provided is not recognised by the CREST system, the instructions will be rejected by CREST.
To ensure accurate value is included in the instruction, the customer must complete fields as follows:
Place of trade MIC | ||
Connectivity medium | Field to be used | Remarks |
Xact via SWIFT and Xact File Transfer | :94B::TRAD//EXCH/XXXX | XXXX being the MIC code of the trading venue such as XLON for the LSE or XOFF for OTC trades |
Xact Web Portal | Place of trade type Code | Identification of the place of trade as appropriate |
CBL does not check the mandatory matching fields or the value included related to CSDR type of trade and place of trade and does not assume responsibility for settlement failures due to non-compliance with the above norms. Customers are advised to confirm the use of these norms in accordance with the market practice and where relevant with their counterparties.
Trades executed on The London Stock Exchange Retail Order Book market
Customers trading UK government bonds (gilts) on the London Stock Exchange Order Book (ORB) market can settle in the EUI CREST system.
In order to trade on the ORB, the customer must be set up as an LSE trading member or access the market via a broker. The customer must provide settlement information to the LSE.
Settlement provider: Clearstream Banking S.A.
Settlement provider BIC: CEDELULLXXX
CREST Participant ID: CEDEL
CREST Membership ID account: NET
Once a trade has been executed, LSE will provide a trade confirmation.
Customers cannot use the Direct Input service and must input a settlement instruction that includes the place of trade as follows:
Connectivity medium | Instruction format |
Xact via SWIFT and Xact File Transfer | Field :94B::TRAD//EXCH/XLON |
Xact Web Portal | Place of trade type Code |
CREST account identification
CBL holds its aggregate customer account positions in a single designated account held under the unique Participant ID “CEDEL”.
To ensure that transactions with counterparties in CREST settle as scheduled, customers must determine with their counterparties the Participant ID from or to which a delivery is to be made.
Receipts
For receipts from counterparties in CREST, customers must do the following:
- Instruct the counterparty to deliver the gilts to CBL’s Participant ID “CEDEL”;
- Determine the Participant ID from which their counterparty is delivering the gilts to CBL’s CREST account;
- Indicate the corresponding CREST counterparty code in their receipt instruction.
The indication of the correct CREST counterparty code is a critical matching element; use of the wrong code may result in a settlement failure.
Example:
A customer that wants to receive gilts from a CREST counterparty and deposit them in its CBL account must instruct its counterparty in CREST to deliver the securities to CBL’s Participant ID “CEDEL”.
The customer must also input a receipt instruction relating to its CBL account indicating the CREST counterparty code corresponding to the counterparty’s
Participant ID.
Deliveries
For deliveries to counterparties in CREST, customers must do the following:
- Determine the Participant ID of the CREST counterparty;
- Indicate the corresponding CREST counterparty code in their delivery instruction.
The indication of the correct CREST counterparty code is a critical matching element; use of the wrong code may result in a settlement failure.
Example:
A customer that wants to deliver gilts from its CBL account to a CREST counterparty must input a delivery instruction relating to its CBL account, indicating the CREST counterparty code corresponding to the counterparty’s Participant ID.
Partial settlements
Market practice is that a counterparty is entitled to deliver as much of its stock as it can according to stock availability and receive as much stock as it can according to cash availability in its CREST account: there are no set minimum amounts for partial settlements. A single trade can be partially settled on a number of different value dates depending on when the delivering party obtains the stock or the receiving party obtains the cash.
CBL customers are not allowed to initiate splits, whereas CREST counterparties are allowed to initiate them. Nevertheless, customer instructions might be subject to a splitting process initiated by CREST counterparties, in which case the original customer instruction (parent instruction) will be cancelled and the booking of securities and cash will be done as two separate bookings on the customer account. The original customer instruction (parent instruction) will be cancelled and will not be replaced by the corresponding split instructions (sibling instructions) in the CBL system.
Decimal allowance
Gilts may be held in CREST in fractional denominations. CBL enables customers to settle and hold UK government debt and foreign sterling-denominated (“bulldog”) instruments with a maximum number of two decimal digits. This applies across all services, including securities settlement transactions for internal CBL-CBL and domestic transactions, securities statements and asset services statements.
Maturity blockings
Gilts generally become ineligible for settlement in CREST on the seventh business day (at close of business) in the UK market before their final maturity date (that is, during the “shutting period”). 3.5% War Stock becomes ineligible on the tenth business day (at the start of real-time processing) before final maturity date.
Generally, the latest opportunity for transactions in maturing gilts to be positioned for settlement with counterparties in CREST is the seventh business day (end of day processing) in the UK market before the final maturity date (or, if such date is not a business day in CBL, the business day in CBL that immediately precedes it). For 3.5% War Stock, the latest opportunity is on the tenth business day (at the start of real-time processing) before final maturity date.
The latest opportunity for transactions in maturing gilts to be settled with counterparties in Euroclear Bank over the Bridge is the last business day (start of real-time processing) in the UK market before the final maturity date (or, if such date is not a business day in CBL, the business day in CBL that immediately precedes it).
Management of failed instructions
- CREST matched receipt and delivery instructions with domestic counterparties that have not settled on SD will remain pending until they settle or until they are cancelled by both parties in CREST.
- CREST matched instructions, for which a cancellation request has been sent to the market, remain blocked for settlement in the CREST system until the cancellation is matched by the counterparty.
Where the cancellation request is not matched by the counterparty, CBL will exceptionally accept an authenticated free format message from customers to reverse the cancellation request in CREST and reactivate the instruction in the system for further settlement. - CREST instructions that remain unmatched by the requested settlement date are reported to CBL as pending. CBL reserves the right to cancel instructions with domestic counterparties that have not been matched by the fifth business day after the requested settlement date.
- Non-CREST instructions that remain unmatched by the requested settlement date are reported to CBL as pending. CBL reserves the right to cancel such instructions by the 15th business day after the requested settlement date.
Deposit of physical gilts
The service is temporarily unavailable following change at Euroclear UK and International CREST Courier and Sorting Service (CCSS).
New issues settlement
Transactions in new issues are settled on the day on which the distribution takes place on the UK market. For confirmation times, please refer to Settlement times.