Settlement services - International (CBF)
Pre-matching service
Matching is attempted directly and the results are reported to customers as “pre-settlement information”.
Free of payment instructions are required to be matched. This applies both to receipt and delivery instructions. The free of payment matching defaults set on the CBF customer’s account will be used, for example, active matchers must enter their instructions themselves and CASCADE automatically generates the matching instructions for passive matchers.
To ensure matching, CBF customers are recommended to inform their CBL/EB counterparties to instruct with the BIC11 of the CBF counterparty in the second matching field.
Note: CBF recommends to agree on the usage of a common reference (:20C::COMM) with the counterparty in CBL/EB to avoid cross-matching if it is populated in the settlement instructions of both parties.
Instruction types
Instruction type | Selected currency | Customers using ICP mode | Customers using DCP mode |
Against payment (RvP and DvP) | Euro in Central Bank Money | DvP format and structure | DvP format and structure |
Against payment (RvP and DvP) | non-T2S currencies | DvP format and structure | Instruction to be set up as FOP containing debit/credit indicator, currency and cash amount details |
Cash management
Settlement in T2S is conducted based on the T2S “Conditional Securities Delivery (CoSD)” logic with the following rule:
The settlement with the external platform (Creation/bridge) must be finalised before the settlement takes place in T2S.
The T2S process starts the conditional settlement analysis of matched Settlement Instructions (and their linked T2S generated realignment Settlement Instructions if any), as of their Intended Settlement Date. The T2S system puts the Settlement Instructions (or the linked T2S generated realignment settlement instructions if any), that meets a CoSD rule, on CoSD hold and blocks the relevant securities or cash depending on the CoSD rules. They will be released by CBF once settlement took place in Creation or over the bridge.
CBF customer DVP or RVP instruction in Central Bank money EUR, will be a standard DVP/RVP in T2S between the CBF customer and the InterCSD account of CBL. The cash movement will take place between the Dedicated Cash Account (DCA) of the CBF customer and CBL DCA.
CBF customers' cash management will be identical as for any CeBM EUR versus payment instructions, that is, the amounts will be included in the reported total amount of the cash forecast. Therefore, no dedicated funding procedure is required. Any setting defined for a DCA will also be applicable for such instructions
On ISD, T2S will apply the CoSD rule. For a RVP in CeBM money EUR, it means that T2S will block the cash on the CBF customer DCA account and will block securities on the InterCSD account. The confirmation of the CoSD securities and cash blocking will trigger CBF to release the instruction in CBL for settlement. Once the External condition is fulfilled (that is, settlement has taken place in the ICSD), CBF will release the CoSD Hold. Consequently, settlement will take place in T2S.
If the RVP in CeBM EUR business instruction is pending at end of day, then a standard T2S process will release the CoSD blocked cash at 16:00 and a new CoSD cash blocking instruction will be re-generated for the following business day. Settlement of the CoSD regenerated CoSD blocking cash settlement restriction will take place in the first night time settlement cycle of the following business day in settlement sequence 0.
Note: The RvP instruction remains subject to CoSD processing at any time. Once CoSD cash is released, the cash amount will be transferred to the RTGS account with the T2S Cash Sweep at around 17:40.
DvP settlement in non-T2S currencies will settle via the related six-series cash account in Creation using Commercial Bank Money (CoBM). The instructions in T2S will be FoP.
Procedures for Creation (CBL) counterparties
Procedure for the CBL counterparty
Delivery in CBF/Receipt from CBF:
- Deliver to/Receive from: CBF account number in Creation 18757.
- For the account of/by order of BIC11 of CBF customer in CASCADE.
Procedure for the EB counterparty
Please refer to Euroclear Bank operational documentation.
Allowed countervalue difference
- Settlement in EUR:
- Tolerance of EUR 2.00 for settlement amounts of up to EUR 100,000.00.
- Settlement in non-EUR:
- Tolerance of EUR 25.00 for transactions of an amount greater than EUR 100,000.00.
The official exchange rates of the ECB, where available, will be used, with their value on 1 January of the respective calendar year.
If no ECB rate is available for a currency, the Bloomberg rate will be used, with their value on 1 January of the respective calendar year.
Back-to-back processing
Back-to-back processing is not available in this market. Nevertheless, same-day turnarounds are in principle possible, provided that the customer sends its receipt instruction as early as possible to CBF for further processing and that securities provision is available.
Management of failed instructions
We distinguish different recycling rules in T2S and in CBL meaning that the most restrictive timeline will apply.
Unmatched instructions
T2S will cancel unmatched instruction after 20 business days.
Matched instructions
T2S will cancel failed matched instructions only upon cancellation request of both parties.