CSDR “CCP penalties”: Change of the Clearstream Banking reporting and payment processing – Reminder
Effective
2 September 2024
Clearstream Banking1 will adapt its reporting and payment processing for penalties related to settlement fails of cleared transactions submitted by central counterparties (CCPs) to comply with the Delegated Regulation (EU) 2023/1626 of 19 April 2023 on amending the regulatory technical standards laid down in Delegated Regulation (EU) 2018/1229.
Today, in line with the RTS Article 19 (penalty payment when the CSD participant is a CCP) of the CSDR Settlement Discipline Regime published in May 2018, penalties related to CCP-cleared transactions (CCP penalties) are calculated and reported by Clearstream Banking but excluded from its payment (that is, collection and distribution) process.
As of the effective date, as it is the case for any other penalties already today, CCP penalties shall be paid via the CSDs towards their participants and no longer by the CCPs towards their clearing members, leading to a streamlined single mechanism for the collection and distribution of cash penalties for both, cleared and non-cleared transactions.
Impact on clients
To identify settlement fails penalties for CCP-cleared transactions, Clearstream Banking derives the information from its account reference data when it calculates the penalties itself. Otherwise, Clearstream Banking forwards the information provided by the penalties calculating (I)CSDs or relevant domestic depositories.
Clearstream Banking will adapt its processing of CCP penalties as follows.
Current process: CCP penalties for failed settlement instructions before 2 September 2024
For settlement instructions related to CCP-cleared transactions for which the MT537 PENA “DACO” (date of computation) is up to and including 1 September 2024, the following applies:
CCP penalties calculated by Clearstream Banking | CCP penalties not calculated by Clearstream Banking |
Clearstream Banking reports self-calculated CCP penalties with the qualifier “CCPA” in field “TRCA” (Trading Party Capacity) to clients. The daily and monthly MT537 PENA reports by Clearstream Banking are labelled “:17B::CMPU//N” in the field “CMPU” (Amount Computed) when “TRCA” (PENACUR) is “:22F::TRCA//CCPA”. This indicates that such penalties are not subject of the monthly payment process and “global net amount” calculation by Clearstream Banking. In Xact Web Portal, the field “Amount Computed Flag” shows “No” for such instances. | Clearstream Banking reports the information as received from the penalties calculating (I)CSDs or relevant domestic depositories to clients. |
Future process: CCP penalties for failed settlement instructions on or after 2 September 2024
For settlement instructions related to CCP-cleared transactions for which the MT537 PENA “DACO” (date of computation) is on or after 2 September 2024, the following applies:
CCP penalties calculated by Clearstream Banking | CCP penalties not calculated by Clearstream Banking |
Independent from the actual content (“CCPA” or other qualifiers) of the field “TRCA”, the Clearstream Banking daily and monthly MT537 PENA client reports will be labelled “:17B::CMPU//Y”, indicating that the penalties are subject to the monthly payment process and “global net amount” calculation by Clearstream Banking. In Xact Web Portal, the field “Amount Computed Flag” will show “Yes” for all instances.2 | No changes apply, that is, the “TRCA” and “CMPU” information as reported to Clearstream Banking will be applied. |
No changes apply to Clearstream Banking’s penalties “appeals” deadlines, daily/monthly reporting and payment dates.
For penalty payments due in October 2024 and thereafter, CCPs will no longer be required to confirm the actual payment execution towards their clearing members to Clearstream Banking.
Further information
For further information, please contact Clearstream Banking Client Services or your 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, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.
2. In insolvency situations, the indicator „N“ may still be used in the Clearstream Banking reporting.