Improved matching process for external instructions - revision
Note: This announcement, originally published on 25 February 2016 and updated on 29 April 2016, 2 May 2016, 12 August 2016 and 17 March 2017 has been further amended. The changes have been highlighted.
Clearstream Banking1 advises customers that, effective
21 March 2016
Clearstream Banking will introduce a new “matching BIC” system for external transactions and improve its allegement reporting and potential matching service.
These improvements are part of Clearstream Banking’s ongoing commitment to enhance its settlement services.
“Matching BIC”
In order to reduce the risk of cross-matching between external instructions, customers can define a BIC (called a “matching BIC”). When sending the customer’s instructions to the local market, Clearstream Banking will include this “matching BIC” in the settlement party details, whether the customer has populated the settlement party fields in the instruction or not, as follows.
- Receipt instructions :95P::BUYR//matching BIC
- Delivery instructions :95P::SELL//matching BIC
For TARGET2-Securities (T2S) markets, if the customer has populated the relevant settlement party fields in their instruction to Clearstream Banking, Clearstream Banking will not overwrite this information with the “matching BIC”.
For Vestima Order Issuers (OIs) placing orders in investment funds that settle in a T2S market, Clearstream Banking enriches settlement instructions with the “matching BIC”. Vestima OIs must ensure that a “matching BIC” is defined for the relevant account(s) in Clearstream Banking as described below. Without a “matching BIC” defined for the relevant account(s), orders in investment funds that settle in a T2S market will be rejected by Vestima.
For further information, please see the table below concerning party instruction details.
A main BIC can be defined by the customer at any time. Clearstream Banking will use this main BIC as the default “matching BIC”.
If the customer’s account is not linked to a main BIC, the customer can define a “matching BIC” by sending a SWIFT MT599 or free-format message via CreationOnline for the attention of PPI Connect.
If the customer’s account is not linked to a main BIC and if no “matching BIC” has been defined:
- the instruction will be sent with no BIC in field :95P::BUYR/SELL (unless the customer has populated these fields in their instruction to Clearstream Banking). If there is no BIC present, it could result in cross-matching between external instructions.
- Orders in investment funds that settle in a T2S market will be rejected by Vestima.
The “matching BIC” logic will be as follows.
| Account set-up | MT599 status | Instruction to the local market |
Main BIC linked to customer’s account | No MT599 sent to Clearstream Banking | Main BIC = “matching BIC” |
| MT599 sent to Clearstream Banking with “matching BIC” details | “Matching BIC” defined by customer | |
| MT599 sent to Clearstream Banking requesting not to use the main BIC as “matching BIC” | No "matching BIC" | |
No main BIC linked to customer’s account | No MT599 sent to Clearstream Banking | No “matching BIC” |
| MT599 sent to Clearstream Banking with “matching BIC” details | “Matching BIC” defined by customer |
External instructions will be populated by default in the party instruction details as follows.
| Transactions on TARGET2-Securities (T2S) markets | Transactions on non-TARGET2-Securities (T2S) markets | |
| External instructions (“matching BIC” defined for the account) | If the customer's instruction contains field :95a::BUYR/SELL, the content of the field will be forwarded to T2S. If the instruction does not contain BUYR/SELL, the “matching BIC” will be forwarded instead”. :95P::BUYR/SELL field Default “matching BIC” | If the customer's instruction contains field :95a::BUYR/SELL, the content of the field will be overwritten with the "matching BIC". If the instruction does not contain BUYR/SELL, the “matching BIC” will be forwarded. :95P::BUYR/SELL field Default “matching BIC” with :97A::SAFE Customer's Clearstream Banking account |
| External instructions (no “matching BIC” defined for the account) | If the customer's instruction contains field :95a::BUYR/SELL, the content of the field will be forwarded to T2S. If the instruction does not contain BUYR/SELL, no BUYR/SELL content will be forwarded to T2S. Vestima orders will be rejected in the market. | If the customer's instruction contains field :95a::BUYR/SELL, the content of the field will be overwritten with the main BIC. If the instruction does not contain field :95a::BUYR/SELL, the main BIC will be forwarded. Field :95P::BUYR/SELL Main BIC with |
Whenever an account has a main BIC but no “matching BIC”, Clearstream Banking will use this main BIC as the default “matching BIC”.
Customers who would like to define a different BIC as “matching BIC” or do not wish the main BIC to be defaulted as “matching BIC” are requested to send a SWIFT MT599 or free-format message via CreationOnline for the attention of PPI Connect before 27 March 2017.
Improvement of allegement reporting
Most allegements received from domestic markets contain the Clearstream Banking customer’s BIC in the BUYR/SELL field without their Clearstream Banking account and therefore are not reported to the customer.
From 21 March 2016, customers will be able to define a main allegement account (that can be linked to many BICs). All allegements received from the domestic market that indicate any BIC linked to the customer’s main allegement account will be reported.
Set-up of the allegement main account
Clearstream Banking will configure the customer’s main account as the allegement main account and all BICs attached to this account will be part of the service.
For customers with multiple main accounts, there will not be any automatic set-up and the customer is requested to provide a SWIFT MT599 or free-format message via CreationOnline for the attention of PPI Connect, containing the account to be configured as the allegement main account.
For CreationOnline allegement queries, no specific subscription is required. The customer will automatically see all the allegements against the BICs linked to their allegement main account.
For MT578 and MT586 reporting or CreationDirect equivalent reports, customers must subscribe via CreationOnline for the allegement main account and tick the new field labelled “Show allegements against BIC” that will be available on the subscription tab.
The safekeeping account field :97A::SAFE (in SWIFT) will contain “00000” as the allegement may be for an account other than the defaulted allegement main account.
Note: Allegements received with only a customer BIC will be visible in CreationOnline if the linked allegement main account is included in the organisational unit. When the Create Matching Instruction is performed, the customer will need to select their account from the drop down list as it will not be defaulted.
Improvement of potential matching service
In addition to reporting the allegements to customers, Clearstream Banking uses an algorithm on all allegements received from the domestic markets to identify a potential match with customers’ instructions.
This potential matching service reports instructions to customers that could potentially match with the allegements from the counterparties and highlights the differences.
Following the 21 March 2016 implementation, if the BIC is mentioned in the allegement, Clearstream Banking will report the best matching candidate even if only four of the following criteria match:
- Transaction type;
- Security code;
- Nominal amount;
- Requested Settlement Date;
- ISO currency code and countervalue within the market tolerance.
The potential matching service logic is as follows.
| No BIC/No Clearstream Banking account mentioned in the allegement | Clearstream Banking account is mentioned in the allegement | Customer’s BIC is mentioned in the allegement | |
| Transaction type | Allegements should match on at least the five criteria to be considered as best matching candidate | Allegements should match on at least four of the five criteria to be considered as best matching candidate | Allegements should match on at least four of the five criteria to be considered as best matching candidate |
| Security code | |||
| Nominal amount | |||
| Requested Settlement Date | |||
| ISO currency code and countervalue within the market tolerance. |
Further information
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
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1.Clearstream Banking refers collectively 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, and Clearstream Banking AG (for CBF customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.