Australia: Austraclear - Mandatory repurchase format requirements

22.10.2021

Clearstream Banking1 informs customers that effective

22 November 2021

customers who perform repurchase agreement (repo) transactions in the Australian market will be required to provide repo information in the first leg (opening leg) and second leg (closing leg) instructions.

Impact on customers

Applicable for any market repo instructions received on or prior to Friday, 19 November 2021 where the settlement date is on after Monday, 22 November 2021. Once the instructions are released by Clearstream Banking to its local custodian upon successful provisioning, they will be settled as normal cash trades. The subsequent second leg (closing leg) received on and after Monday, 22 November 2021 will be settled as normal cash trades as well.

Customers are required to instruct two separate instructions corresponding to the first leg and the second leg for the Market Repo transactions, using the settlement narrative (:70E:) to confirm the repo details. The automatic unwind functionality will not apply in this process.

Customers are required to use the same SECO reference for the first and second legs of their repo instructions. The SECO reference indicated in field :70E: for the first and second legs of the instructions must be the same in order for Clearstream Banking’s local custodian to identify the linkage between both legs of the trade. Any updated repo details in the second leg instruction will be used to finalise the repo trade.

Please refer to the following requirements below.

Repo requirements for Xact via Swift and Xact File Transfer

Field

Fields to be used

 Repo logic

Trade Classification


:22F::SETR//TRAD

  • No REPE or RVPO should be used.
  • “TRAD” to be used for first and second leg instruction.

Settlement narrative for the first leg

:70E::SPRO///<REPO>/<SECO XXXXXXXX>/<TERM YYYYMMDD>/<RATE X,XX>

Example:
:70E::SPRO///REPO/SECO Trade Ref2/TERM 20211206/RATE 6,66

  • A MT543 will be interpreted as a REPE repo. For MT541, this will be interpreted as a RVPO repo.
  • “REPO” is a prefixed code and must be presented to denote it’s the first leg/opening leg of a repo instruction.
  • “SECO” is a prefixed code and followed by a trade reference, this must be indicated in the first and second leg for Clearstream Banking’s local custodian to ensure the linkage between the first and second legs of the trade.
  • “TERM” is a prefixed code and followed by either YYYYMMDD or OPEN.
  • RATE is the repo rate

Settlement narrative for the second leg

:70E::SPRO///<REPO CLOSE>/<FIRST LEG SETT YYYYMMDD>/<RATE X,XX>

Example:
:70E:: SPRO///REPO CLOSE/SECO Trade ref2/FIRST LEG SETT 20211021/RATE 6,00

  • REPO CLOSE is a prefixed code and must be presented to denote it’s the second leg/closing leg of a repo instruction.
  • “SECO” is a prefixed code and followed by a trade reference, this must be indicated in the first and second leg for Clearstream Banking’s local custodian to ensure the linkage between the first and second legs of the trade.
  • FIRST LEG SETT is a prefixed code and followed by the settlement date of the first leg.
  • Any change to the repo rate must be indicated in field :70E: after the prefixed code “RATE”, otherwise no need to mention the repo rate again.
  • The settlement date and the settlement amount of the second leg will be used to finalise the closing repo details.

Overview of repo requirements for Xact Web Portal

Field

Fields to be used

 Repo logic

Settlement instruction processing additional details for the first leg

/<REPO>/<SECO XXXXXXXX>/<TERM YYYYMMDD>/<RATE X,XX>

Example:
/REPO/SECO Trade Ref2/TERM 20211206/RATE 6,66

  • A MT543 will be interpreted as a REPE repo. For MT541, this will be interpreted as a RVPO repo.
  • “REPO” is a prefixed code and must be presented to denote it’s the first leg/opening leg of a repo instruction.
  • “SECO” is a prefixed code and followed by a trade reference, this must be indicated in the first and second leg for Clearstream Banking’s local custodian to ensure the linkage between the first and second legs of the trade.
  • “TERM” is a prefixed code and followed by either YYYYMMDD or OPEN.
  • RATE is the repo rate

Settlement instruction processing additional details for the second leg

/<REPO CLOSE>/<FIRST LEG SETT YYYYMMDD>/<RATE X,XX>

Example:
/REPO CLOSE/SECO Trade ref2/FIRST LEG SETT 20211021/RATE 6,00

  • REPO CLOSE is a prefixed code and must be presented to denote it’s the second leg/closing leg of a repo instruction.
  • “SECO” is a prefixed code and followed by a trade reference, this must be indicated in the first and second leg for Clearstream Banking’s local custodian to ensure the linkage between the first and second legs of the trade.
  • FIRST LEG SETT is a prefixed code and followed by the settlement date of the first leg.
  • Any change to the repo rate must be indicated in field :70E: after the prefixed code “RATE”, otherwise no need to mention the repo rate again.
  • The settlement date and the settlement amount of the second leg will be used to finalise the closing repo details.

If the above-mentioned repo requirements are not respected, Clearstream Banking cannot guarantee timely settlement of customers’ instructions.

Settlement Deadlines

Settlement deadlines remain unchanged. Please refer to the Market Link Guide – Australia for further details

Further information

Clearstream Banking is currently working on a fully STP bilateral repo service for external settlement which will be made available within Q1 2022. More details will be shared in due course. In the meantime, customers who wish to conduct bilateral repos with their counterparties in Australia may already do so by adopting the process highlighted in this announcement.

Bilateral repo transactions that are settled internally within the Clearstream Banking platform are not impacted by this change.

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

---------------------------------------

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 Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.