TARGET2-Securities is a platform that centralizes the delivery-versus-payment settlement in central bank funds across all European securities markets. Intended to integrate and harmonize the fragmented securities settlement infrastructure in Europe into a single market infrastructure solution, T2S enables one Central Securities Depository (CSD) to be the CSD for any other T2S market securities, upon approval. This setup allows settlement of the securities in a different CSD from the issuer, which is generally referred to as the Investor CSD model.
Some DTCC Global Custodians and Investment Banks are planning on moving settlements to the Investor CSD model in the coming months and DTCC has made various updates to accommodate for this, full details of which can be found below. All ALERT and CTM clients should be aware of the changes and make sure they are following best practices to ensure smooth settlement. The below grid summarizes the impact if you do/don't implement these changes within your workflow.
Investor CSD Features
Traditionally, a depository could only be added under the ALERT Country Code if the selected depository is in the same country. ALERT now allows all T2S depositories to be added under each T2S country.
Place of Settlement (PSET) Matching provides CTM investment managers with the ability to compare the PSET BIC provided by their sell-side counterparty withy their own PSET BIC for each of their allocations.
Where the BIC doesn't match, the allocation will be flagged with a status of mismatched (MISM) providing users with the opportunity to intervene and fix the matching issue before settlement.
To switch on PSET matching, you will need to update your matching profile(s) to set the Trade Detail PSET field to EXCT (exact matching).
Step by step instructions on how to do this can be found in the How to Edit a Matching Profile video.
To facilitate the matching of PSET BICs across different T2S markets, the PSET matching rules have been extended to allow the matching of BICs across any of the following T2S PSET BICs:
|Market||PSET Name||PSET BIC|
|Austria||OeKB CSD GmbH||OCSDATWWXXX|
|Belgium||Euroclear Belgium (ex CIK)||CIKBBEBBXXX|
|Belgium||The Banque Nationale de Belgique/Nationale Bank van Belgie||NBBEBEBB216|
|Denmark||VP A/S - the Danish Securities Centre||VPDKDKKKXXX|
|Finland||Finnish Central Securities Depository Ltd (APK)||APKEFIHHXXX|
|Finland||Finnish Central Securities Depository Ltd (APK)||APKEFIHH|
|France||Euroclear France (ex Sicovam)||SICVFRPPXXX|
|Germany||Clearstream Banking Frankfurt||DAKVDEFFXXX|
|Greece||Bank of Greece||BNGRGRAA|
|Hungary||Kozponti Elszamolohaz es Ertektar Rt (Keler)||KELRHUHBXXX|
|Italy||Monte Titoli spa||MOTIITMM|
|Malta||Malta Stock Exchange||XMALMTMT|
|The Netherlands||Euroclear Netherlands||NECINL2AXXX|
|Romania||Depozitarul Central S.A.||DECNROBU|
|Slovak Republic||CENTRALNY DEPOZITAR CENNYCH PAPIEROV SR, A.S.||CSDSSKBAXXX|
|Slovenia||Centralna Klirinsko Depotna Druzba d.d. (KDD)||KDDSSI22XXX|
|Switzerland||SIS - SEGAINTERSETTLE AG||INSECHZZXXX|
Buy-side CTM users can now switch on the CBIC subscription for their organization. If this is enabled, CTM will automatically copy the PSET BIC value to the PSAF field. We strongly recommend that users of the CTM Settlement Notification functionality do this. This functionality will also be available to sell-side clients at a later date.
If, once matching takes place, CTM identifies that the PSET and PSAF values are identical, it will remove the PSAF value. Below is an example of the Settlement Information when the CBIC subscription is enabled, along with the corresponding tags as populated in the SWIFT message.
:94F::SAFE//NCDS/SICVFRPPXXX (94 is the PSAFE)
:95P::PSET//CIKBBEBBXXX (95P is the PSET)
To enable the CBIC subscription, your Product Administrator will need to submit a support case requesting that the CBIC subscription for your CTM organization. A case can be submitted at www.dtcc.com/servicecentral.
To summarize, in order to leverage all of the latest updates you should:
1. Set up SSIs based on any changes a Global Custodian may advise
2. Add PSET as an EXCT matching field (for Trade Detail matching) within your CTM matching profile(s)
3. Switch on the CBIC subscription for your CTM organization