T2S and CBF Releases: Information on the production launches in November 2024
Clearstream Banking AG, Frankfurt,1 informs clients about the TARGET2-Securities (T2S) R2024.NOV and the CBF release in November 2024. According to the T2S Release Concept, the releases will be deployed on
the weekend 16 and 17 November 2024
for business day, Monday, 18 November 2024
T2S R2024.NOV – Scope
With the T2S Release R2024.NOV, six Change Requests (CRs) will be introduced in production. They have already been approved at T2S Steering Level. In addition, the release will fix various malfunctions and close the related T2S Problem Tickets (PBIs). In the event of urgency and if priority is given, further functional updates might be authorised by the Operational Managers Group (OMG). If such changes are announced by T2S, CBF will inform clients in due time.
The following overview presents the scope elements for T2S Release R2024.NOV and indicates if the modification might have impact on CBF clients acting in Indirect Participant (ICP) and/or Direct Participant (DCP) mode:
- T2S Change Requests
At present, six CRs are scheduled for implementation by T2S. Please find all approved T2S Change Requests (CRs) in the list attached.
Based on the functional description provided by T2S, CBF identified the system requirements for November Release 2024. CBF aims to absorb the impact on clients acting in ICP mode as much as possible.
In the attached list, clients acting in (Cash) DCP mode will find additional information. More details on these requirements can be found in the related ECB documentation2. - Problem Tickets (PBIs)
CBF’s review of the latest list of pending PBIs, provided by T2S (as of mid-May 2024), has identified seven tickets that might have impact on CBF’s clients operating in (cash) DCP mode. One further PBI can affect CBF clients operating in ICP or DCP mode (see attachment).
CBF’s assessment for these Problem Tickets shows that the fixes will not require software changes in CBF. Clients are recommended to validate these scope elements and check whether operational and/or functional modifications in their procedures are required.
Experience from CBF’s periodic assessment of these lists shows that until the launch of a T2S release, additional tickets will be authorised for implementation. Therefore, this Announcement and the attached list of prioritised PBIs will be updated over the coming months. - Transition plan
The installation of T2S Release R2024.NOV into production is planned for the third weekend in November 2024. The deployment will be executed via the “Release Weekend Schedule”. As with the introduction of the previous T2S Releases, the schedule of the T2S Operational Day will be modified according to the implementation activities. The deployment will start once the end of day procedure (“T2S End of Day”) on Friday, 15 November 2024, has been completed. In the week before the implementation, CBF aims to provide an indicative timeline for changes in the operational day during the deployment weekend.
The table below provides an overview of the important T2S milestones within the next months:
T2S Service Transition Plan
Activity for T2S Release R2024.NOV | Date |
Publication date for draft Scope defining set of documents | Friday, 23 July 2024 |
Service Transition Status Report for R2024.NOV in Pre-Production | Monday, 9 September 2024 |
OMG Go / No-go decision to deploy R2024.NOV to Pre-Production | Tuesday, 10 September 2024 |
Latest publication date for updated Scope defining set of documents | Friday, 20 September 2024 |
Deployment of R2024.NOV to Pre-production | Friday, 20 September 2024 |
End of testing of R2024.NOV scope elements in Pre-Production | Wednesday, 30 October 2024 |
MIB approves the R2024.NOV deployment to Production | Tuesday, 5 November 2024 |
Deployment of R2024.NOV to Production | Saturday, 16 November 2024 |
T2S Release R2024.NOV - implementation timeline
T2S CR with potential client impact
The following CR complements the current scope of services and will be available to CBF clients after the implementation of T2S Release R2024.NOV. The changes do not require any software modifications in CBF’s client-facing systems. However, CBF recommends clients to review the changes for any necessary adjustments in their operational procedures.
T2S-0789-URD “Handling automatic cancellation for T2S External Transactions”
With the release 4.2 in November 2020, T2S implemented with CR T2S-0691-URD (“Recycling period of 60 business days for matched instructions”) an automatic cancellation of all pending settlement transactions after 60 business days have passed since their Intended Settlement Day (ISD) or the last status change (see Announcement D20010).
The rule applies to transactions with T2S Out-CSDs as well, even if those CSDs do not follow the same cancellation rules. In rare cases, this causes reconciliation problems:
- Transactions still pending with the T2S Out-CSD, but already cancelled in T2S, may cause penalties that the affected party cannot assign to a transaction in T2S.
- Transactions settled with the T2S Out-CSD, but already cancelled in T2S, cannot be settled in T2S anymore.
With CR T2S-0789-URD, the automatic cancellation process for matched settlement transactions after 60 business days since the ISD or the last status change, will be adapted to not cancel transactions of T2S Out-CSDs qualified as non-compliant to this rule and being the Issuer CSD of the security concerned.
Currently, CBF settles instructions for three T2S Out-CSDs:
1. CBL (Clearstream Banking Luxembourg)
Currently, CBL:
- Offers CBF clients with the link to CBL through account 4496 (BIC CEDELLULLCPI) the opportunity to settle instructions in selected Eurobonds and Finnish securities against CBL and Euroclear (EOC) counterparties (see International).
- Receives a cancellation advice from CBF, once T2S has sent a corresponding cancellation message to CBF to announce a T2S automatic cancellation. In these markets, CBL cancels only if confirmed by the affected CBL/CBF-i client.
- Allows matched instructions to settle beyond 60 days of pending on client confirmation.
CBL will be defined as a T2S Out-CSD non-compliant to the T2S rule for a recycling period of 60 business days for matched instructions. Consequently,
- T2S will not automatically cancel after 60 business days pending matched CBF instructions against CBL or EOC counterparties via account 4496 anymore.
- CBF transactions against CBL or EOC counterparties via account 4496 will only be cancelled by T2S upon cancellation requests of both parties involved.
2. DTCC (Depository Trust and Clearing Corporation, U.S. CSD)
Currently, DTCC transactions:
- Are settled in DTCC without matching ("dumps") if the receiving party does not reject them ("DK – don’t know"). In T2S, transactions are matched based on a counter-instruction generated by CBF.
- With the DTCC participant as receiver of the shares and matched in T2S, but not settled because of being on hold (function PREA) or a lack of deliverable securities, are automatically cancelled by T2S after 60 business days.
- With the DTCC participant as deliverer of shares and left open in T2S, are cancelled by CBF with the CASCADE end of day process.
- Against CDS (Canadian central depository, so-called north- or southbound flips) have extended reclaim rights and can remain open in CDS.
DTCC will be defined as a T2S Out-CSD non-compliant to the T2S rule for a recycling period of 60 business days for matched instructions. Consequently,
- T2S will not cancel pending matched DTCC instructions after 60 business days anymore.
- DTCC transactions with T2S will only be cancelled upon cancellation request received from the instructing party (DTCC or CBF client).
3. SIX SIS (Swiss Infrastructure and Exchange & Swiss Invest Selection, Swiss CSD)
Currently, SIX SIS:
- Acts as T2S Out-CSD only for transactions in Swiss securities against Swiss Francs (CHF) or optionally free of payment.
- Leaves as T2S Out-CSD pending matched OTC deliveries open until cancelled by one instructing party or automatically by T2S, whereas receipts are automatically cancelled twenty calendar days after the requested settlement date (ISD).
- Receives a cancellation advice from CBF, once T2S has sent a corresponding message to CBF for a T2S automatic cancellation.
SIX SIS will be defined as a T2S Out-CSD compliant to the T2S rule for a recycling period of 60 business days for matched instructions. Consequently, the current procedure will not change with the implementation of CR T2S-0789-URD.
CBF: Enhancements of the OTC Recycling Procedure
With the CBF release in November 2018, the recycling process for non-CCP stock exchange transactions (see D17011), which automatically resends instructions to T2S previously rejected due to missing securities master data, was extended to OTC instructions.
With the CBF release in November 2024, the recycling process will be simplified as follows:
The OTC recycling process is applied to instructions that:
- are not linked to any other instruction; and
- are sent via Swift, MQ or File Transfer and show the flag TRAD in field 22F (Type of Settlement Transaction Indicator, :22F::SETR//TRAD); or
- via Xact with "Securities Transaction Type" TRAD; or
- via CASCADE HOST with TRAD or without ISO transaction code.
Client simulation
The simulation activities for the T2S release will be conducted in a “free simulation mode”. The already established static data for CBF accounts and the related connectivity settings in the CBF client simulation environment (IMS23) and in the T2S Pre-Production Environment (UTEST) remain unchanged. Nevertheless, clients need to send an email to t2s-support@clearstream.com to be registered as tester, and to receive more details about the simulation requirements.
According to the ECB planning, the updated software for the T2S Release R2024.NOV will be installed on Friday, 20 September 2024, in UTEST. As of this moment, DCPs can start their simulation activities. In IMS23, the new software will be available on 14 October 2024. Details about extraordinary closing days and opening hours are provided on a webpage dedicated to the availability of the client simulation environments (UTEST/IMS23/OCCT).
In the period from 23 September to 1 November 2024, to test CR T2S-0789-URD, the recycling period for pending matched transactions will be shortened to five business days. CBF recommends clients to conclude their testing activities for this CR until then. All other regression testing will be possible until the implementation weekend.
Contact
For further information, clients may contact Clearstream Banking Client Services or their Relationship Officer. Questions related to the technical connection can be addressed to Connectivity Support. Particular questions related to the production launch in November 2024 will be routed to the experts of the T2S Release Management.
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1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.
2. Details about the scope elements of T2S Release R2024.NOV are published on the ECB’s website.