T2S Migration Wave 4

The migration of the Austrian and German Central Securities Depositories (CSD), to Target 2 Securities (T2S Wave 4) is approaching and is scheduled for the weekend of 4-5 February 2017, with an Initial Settlement Date of  6 February 2017. The purpose of this newsflash is to inform our Clearing Participants of the following information:-

  • EuroCCP’s Standard Settlement Instructions (SSIs).
  • the implementation of the new functionality.
  • client testing.
  • the reporting and the treatment of (pending) settlement instructions during the migration weekend.
Standard Settlement Instructions

With the migration of Wave 4 to the T2S platform, settlement arrangements and SSIs of Clearing Participants and EuroCCP for the Austrian and German market will change. EuroCCP have contacted those Clearing Participants that are active on these markets, to obtain their T2S SSIs via the T2S Client Information Form, which should be returned to EuroCCP no later than 14 December 2016.

As from Trade Date Monday 6 February 2017, EuroCCP will act as a Directly Connected Party to T2S through OeKB, the Austrian CSD and Clearstream Banking Frankfurt, the German CSD.

The new EuroCCP SSIs, as detailed below, will apply for settlement instructions with Trade Date Monday 6 February 2017 and thereafter:-

EuroCCP SSIs OeKB:

Delivery / Receiving party BIC (DEAG / REAG)
EMCFNL2AXXX
T2S Securities Account
OCSD212511
CSD of Delivering / Receiving party (PSET)
OCSDATWWXXX
Client of Delivering / Receiving party (Seller / Buyer)
EMCFNL2AXXX

EuroCCP SSIs Clearstream Banking Frankfurt:

Delivery / Receiving party BIC (DEAG / REAG)
EMCFNL2AXXX
CSD of Delivering / Receiving party (PSET)
DAKVDEFFXXX
Client of Delivering / Receiving party (Seller / Buyer)
EMCFNL2AXXX

New functionality

With the implementation of T2S in the Austrian and German market, a range of  T2S functionality will become available, including “Already Matched”, “Automated Partial”, “New Instruction Types” and the “Hold and Release” functionality.

The implementation of these functionalities for these two markets are scheduled as follows:-

Functionality

  • EuroCCP become DCP, 6 February 2017
  • Partial settlement use of “PARQ” (Mandatory requirement), 6 February 2017
  • New Instruction Types, DWP/RWP/PFOD (optional), 6 February 2017

3 options to send settlement instructions:-

  • Bilateral Matching (self instructing), Live
  • Agent POA (EuroCCP to Agent), Live
  • Optional “CSD POA” instructions, 6 February 2017

EuroCCP has postponed the preparation on the “Hold and Release” functionality and the mandatory use of CSD POA, until the second half of 2017.

Power of Attorney

EuroCCP will continue to support Settlement Agent POA services, where settlement instructions are delivered to the Settlement Agent on behalf of a Clearing Participant, following Wave 4 of the  T2S migration.

Clearing Participants must update their current settlement agent POA agreements in the  Annex section with their new SSIs no later than 30 December 2016.

The CSD POA, which authorizes EuroCCP to send ‘Already Matched’ settlement instructions to the T2S platform on behalf of the CSD participant, will be optional from the day EuroCCP activates its direct link to OeKB, CBF and T2S.

Reporting (CIF and POAs)

As from Trade Date 16 Jan 2017, EuroCCP’s settlement instructions and Client Information File (CIF) will contain the new PSET, the BIC11 of the local CSD in the German market.

The 8-digit CSD BIC will change to CSD BIC11 as follows:-

  • From DAKVDEFF to DAKVDEFFXXX

The PSET for the Austrian CSD, OCSDATWWXXX, already contains eleven positions.

In addition, the updated Clearing Participants SSIs will be reflected in the CIF for transactions with Trade Date 3 February 2017. Transactions that were cancelled prior to the migration weekend will be re-created by EuroCCP  and re-instructed by EuroCCP’s settlement agent after the point of no return, during the migration weekend. Also for those settlement instructions, the new SSIs of Clearing Participants will be reflected in the CIF.

Wave 4 Migration

The migration of Wave 4 is scheduled as follows:-

  • Friday 3 February 2017
    • Last Settlement Date in OeKB and CBF legacy settlement system.
    • Last Trade Date for trades that will settle through the accounts with EuroCCP’s settlement agents.
  • Friday 3 February to Sunday 5 February 2017
    • Migration Weekend
  • Monday 6 February 2017
    • First T2S Settlement Date;
    • At close of business, EuroCCP will send the first settlement instructions for the Austrian and German market to the T2S platform with Trade Date 6 February 2017.

Pending settlement instructions will be migrated as follows:-

Matched settlement Instructions: will be migrated by OeKB and CBF

Austrian market:

Unmatched settlement instructions: will be cancelled by OeKB

German market:

Unmatched settlement instructions: will be migrated by CBF

In order to ensure the successful migration of all settlement instructions to the T2S platform, Clearing Participants must ensure that they fully release all trades to the CSD with a Trade Date prior to 6 February 2017, on the actual Trade Date.

Migrated unmatched settlement instructions and cancelled unmatched settlement instructions must be matched in T2S. Clearing Participants and their Settlement Agents should be aware that the following EuroCCP SSI’s will apply to the migrated unmatched settlement instructions:-

The following SSIs will only apply for settlement instruction with a Trade Date  prior and including Friday 3 February 2017:-

EuroCCP SSIs OeKB:

Delivery / Receiving party BIC (DEAG / REAG)
EMCFNL2AXXX
T2S Securities Account
OCSD212500
CSD of Delivering / Receiving party (PSET)
OCSDATWWXXX
Client of Delivering / Receiving party (Seller / Buyer)
EMCFNL2AXXX

EuroCCP SSIs CBF:

Delivery / Receiving party BIC (DEAG / REAG)
CITIDEF1009
CSD of Delivering / Receiving party (PSET)
DAKVDEFFXXX
Client of Delivering / Receiving party (Seller / Buyer)
EMCFNL2AXXX

EuroCCP’s settlement instructions with Trade Date 3 February 2017 will be instructed in the T2S platform once the point of no return has been reached during the Migration weekend.

Reporting during the Migration Weekend

EuroCCP’s CIF file will be sent out on Friday 3 February 2017 as usual.  Settlement instructions which are sent to Settlement Agents by EuroCCP under a POA will also be distributed on Friday 3 February 2017.

Client testing

EuroCCP strongly recommends that its Clearing Participants undertake different test cases for those markets in Wave 4 in which they are active. EuroCCP is planning to participate during the Migration Weekend Dress Rehearsal on 16-17 December 2016 and the Business Day testing scheduled for 19-21 December 2016.

During the Business Day test, EuroCCP will copy production flow and submit these settlement instruction in T2S. Settlement instructions that are created on behalf of a Clearing Participant will be delivered to the Settlement Agent.

Should Clients require further information about testing please contact clienttesting@euroccp.com.