Bridge: Shorter Bridge settlement window for domestic debt securities subject to early or final redemption - Update

23.07.2024

Note: This announcement, originally published on 30 June 2023, and updated on 11 October 2023, has been further updated to provide clients with information on Bridge transactions and deadlines. Changes have been highlighted.

To further enhance the financial resilience of the Bridge settlement interoperable link and to comply with regulatory requirements, the ICSDs, Clearstream Banking S.A. (CBL)1 and Euroclear Bank, have agreed on a set of risk management control measures designed to minimise cross-holdings2 on the record date (RD)3 applicable to domestic debt securities subject to early or final redemptions.

Effective

9 September 2024

to achieve this objective, the ICSDs will shorten the Bridge settlement window on the last day the security is allowed to be exchanged in the ICSD and in the local market before redemption.

Some domestic debt securities approaching their redemption date, whether final or early, are not available for transfer in the local CSD a number of business days before the redemption date and may be subject to special restrictions on the Bridge.

For these markets, the last day for Bridge transactions to settle will be calculated as follows:

Markets

Last day for Bridge transactions to settle

Rule applicable until and including 6 of September 2024

Last day for Bridge transactions to settle

Rule applicable as of and including 9 of September 2024

Australia

Maturity date minus seven calendar days

MD minus eight calendar days

Japan

Maturity date minus 21 calendar days

MD minus two business days

UK – gilts securities

Maturity date minus seven business days

MD minus seven business days

Hungary

Maturity date minus two business days

MD minus two business days

Norway

Maturity date minus two business days

MD minus two business days

Sweden AM market

Maturity date minus five business days

MD minus five business days

Czech Republic

(all debt securities except T-bills)

Maturity date minus one business day

MD minus 30 calendar days

For all the other markets not subject to special restrictions, the last day for Bridge transactions to settle will be on the maturity date minus one business day.

The last day for Bridge transactions to settle must always be a local and an ICSD business day, otherwise where such date is a local and/or an ICSD bank holiday, the last day for Bridge transactions to settle is on the first day preceding the calculated date that is a local and ICSD business day.

In exceptional cases there may be deviations to the before mentioned rules due to decisions at issuer level.

The settlement windows for the following instruction types remain unchanged:

  • Internal settlement instructions;
  • External (“cross-border”) settlement instructions;
  • Bridge settlement instructions for domestic debt securities not subject to early or final redemption.

Input deadline

Since Monday, 11 December 2023, the input deadlines for Bridge transactions to be eligible for settlement on the start date of the restricted period or where no such period applies, on the maturity date minus one business day, apply as follows:

Instruction type

Input deadline

Free of payment (FoP)

Two hours prior to the FoP external settlement input deadlinea applicable to the market where the securities are deposited, as indicated in the Settlement Timings Matrix.

Against payment (AP)

The input deadline will be one of the following, whichever is the earliest:

  • The standard Bridge settlement input deadline, as indicated in the Bridge settlement – Input deadlines page; or
  • Two hours prior to the FoP external settlement input deadlinea applicable to the market where the securities are deposited, as indicated in the Settlement Timings Matrix.

a. In markets where summer time and winter time input deadlines apply, the input deadline will be fixed for Bridge settlement on RD to two hours prior to the winter time FOP external settlement input deadline indicated in the Settlement Timings Matrix.

Example:

The Bridge input deadline on RD3 of an early or final redemption event for securities deposited in T2S (for which the input deadline for FoP instructions is 17:55 CET) will be impacted as follows:

Standard Bridge input deadline in CET

FoP external settlement input deadline in CET

Applicable input deadline in CET (the earliest of both)

FoP instructions or AP instructions eligible in the optional window

18:30

17:55

15:55 (=17h55-2h)

AP instructions (All currencies except EUR, GBP, ARS, CAD, MXN, PEN and USD)

13:50

17:55

13:50 (no change as earlier than 17h55-2h)

AP instructions (EUR, GBP)

15:20

17:55

15:20 (no change as earlier than 17h55-2h)

AP instructions (ARS, CAD, MXN, PEN and USD)

17:00

17:55

15:55 (=17h55-2h)

All valid instructions received before the deadline will be attempted for settlement if all settlement obligations are fulfilled. The ICSDs make no commitment to attempt to settle such instructions received after the deadline.

To maximise settlement opportunities in the reduced settlement window, it is strongly recommended that clients submit their instructions as soon as possible and to ensure sufficient securities or liquidity is available.

Exceptions to the above-mentioned input deadlines apply in some markets:

Instruction type

Bridge input deadline – Today in CET


Bridge input deadline – New in CET

Poland

Irelanda

Slovak Republic

UK securities

Argentina

Switzerland

Singapore

Romania

DEUTSCHE BANK AG Londonb

FoP instructions or AP instructions eligible in the optional window

18:30

11:50

13:55

14:25

16:00

16:30

17:00

05:15

13:25

14:30

AP instructions (All currencies except EUR, GBP, ARS, CAD, MXN, PEN and USD

13:50

11:50

13:50 (no change as earlier than 13:55)

13:50 no change as earlier than 14:25)

13:50 (no change as earlier than 16:00)

13:50 (no change as earlier than 16:30)

13:50 (no change as earlier than 17:00)

05:15

13:25

13:50 (no change as earlier than 14:30)

AP instructions (EUR, GBP)

15:20

11:50

13:55

14:25

15:20 (no change as earlier than 16:00)

15:20 (no change as earlier than 16:30)

15:20 (no change as earlier than 17:00)

05:15

13:25

14:30

AP instructions (ARS, CAD, MXN, PEN and USD)

17:00

11:50

13:55

14:25

16:00

16:30

17:00

05:15

13:25

14:30

a. Deadlines applicable to all debt securities except for Government debt securities (including treasury bills) for which the input deadline rule as described above applies.

b. Depository Code 78.

All the input deadlines will be updated in the Settlement Timings Matrix in due course.

Further information

For further information, clients may contact Clearstream Banking Client Services or their Relationship Officer.

The Link Guide - Bridge will be updated in due course.

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1. Clearstream Banking refers to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.

2. When one ICSD, as a result from Bridge settlement, has the custody of the other ICSD’s securities.

3. The record date for early and final redemption events is the date on which a position is recorded to determine the entitlement of the shareholder to receive the cash proceeds.