ALERT: Cross-Border Settlement Instructions
Certain Central Securities Depositories (CSDs) can settle securities outside the CSD's country of origin, leading to across-border settlement instruction.
Identify the appropriate PSET (METHOD) for a cross-border settlement instruction and refer to the Market-Specific Best Practices for that depository. Best Practices lists requirements for settlement in that location such as participant/membership numbers for the ID1 field (ex: CREST ID, EUROCLEAR ID).
The Place of Safe Keeping (PSAF) or the CSD where your counterparty holds the securities may change the local agent clearing the cross-border settlement. If so, this can impact the Local Agent BIC, depository membership IDs (ID1), and A/c @ Local Agent within your instruction.
The below table shows examples of cross-border settlement instructions for equity securities issued in Austria.
| Example | Country | Security | Method | ID1 | A/c @ Local Agent | Client PSET (Place of Settlement) | Local Agent BIC | Custodian BIC | Counterparty PSAF (Place of Safe Keeping) | Description |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | AT | EQU | OKB_AG | OCSD243900 | 64450 | OCSDATWWXXX | CEDELULLXXX | SOLADESTXXX | OCSDATWWXXX (non-LMP) | Standard domestic settlement |
| 2 | EU (AT) | EQU | CEDEL | 64450 | Blank | CEDELULL | SOLADESTXXX | Blank | CEDELULL | Standard CEDEL settlement |
| 3 | AT | EQU | CLEARGER | DAKV7201100 | 64450 | DAKVDEFFXXX | CEDELULLXXX | SOLADESTXXX | OCSDATWWXXX (LMP) | Cross border where counterparty holds AT securities at Austrian depository |
| 4 | AT | EQU | CLEARGER | DAKV4450000 | 4450 | DAKVDEFFXXX | SOLADEST050 | Blank | DAKVDEFFXXX (T2S) | Cross border where counterparty holds AT securities at German depository |
In the below examples, Austrian securities’ settlement can occur:
-
Domestically through the Austrian CSD using PSET BIC OCSDATWWXXX
(AT – SECTYPE – OKB_AG)
-
Through CEDEL using PSET BIC CEDELULL
(AT – SECTYPE – CEDEL)
-
Cross-border through the German CSD using PSET BIC DAKVDEFFXXX
Austrian securities that settle in another country's depository, in this case, settlement at Clearstream Banking Frankfurt, in Germany would therefore use the Method of the clearing depository (CLEARGER.)
(AT – SECTYPE – CLEARGER)
When a trade requires cross-border settlement, settlement instructions can vary depending on the PSAF of the CSD where your counterparty holds the securities, shown in the below examples:
-
The counterparty holds their Austrian equities at the Austrian depository (the most common occurrence in this market). CEDEL (CEDELULLXXX) is used as the local agent to enable the cross-border movement between the two CSDs.
-
Your counterparty holds their Austrian equities at the German depository where you have agreed to settle, such as in TS2 markets. The local agent within the settlement instruction references a local German agent BIC (SOLADEST050).