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Participant Meeting November 29 th , 2019 Agenda 1. Business Facts - - PowerPoint PPT Presentation

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OeKB CSD Participant Meeting November 29 th , 2019 Agenda 1. Business Facts & Figures 2. Upcoming T2S Releases 2020 3. Report 5 th Meeting of the User Committee 4. Project Settlement Discipline 5. T2/T2S Consolidation 6. Project

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SLIDE 1

OeKB CSD Participant Meeting

November 29th, 2019

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SLIDE 2

Agenda

  • 1. Business Facts & Figures
  • 2. Upcoming T2S Releases 2020
  • 3. Report 5th Meeting of the User Committee
  • 4. Project Settlement Discipline
  • 5. T2/T2S Consolidation
  • 6. Project Shareholder Rights Directive
  • 7. AOB

November 29th, 2019 2

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SLIDE 3
  • 1. Business Facts & Figures
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SLIDE 4
  • 1. Business Facts & Figures as of 31.10.2019

November 29th, 2019 4

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SLIDE 5
  • 2. Upcoming T2S Releases 2020
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  • 2. Upcoming T2S Releases 2020

(1/3)

T2S Problem Release 3.3

  • TEST January 17th, 2020
  • PROD February 15th, 2020
  • Problem Tickets only, no impact on participants

November 29th, 2019 6

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  • 2. Upcoming T2S Releases 2020

(2/3)

T2S Major Release 4.0

November 29th, 2019 7

  • TEST May 15th, 2020, PROD June 13th, 2020
  • 6 Change Requests

CR Number CR Description Document T2S-0671-SYS Reporting of Beneficial Ownership indicator in allegements, status messages and settlement confirmations Link T2S-677-SYS During partial settlement windows, recycling should only be triggered after an

  • ptimisation attempt

Link T2S-658-SYS T2S should allow and process already matched instructions with deviating settlement parameters on DELI and RECE legs Link T2S-668-SYS Provide the T2S reference of the linked instructions preventing settlement Link T2S-689-URD New process to maximise settlement of transactions at DVP cut-off Link T2S-0719-SYS Common Reference Data Management for T2-T2S Consolidation – Modified Objects Link

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SLIDE 8
  • 2. Upcoming T2S Releases 2020

(3/3)

T2S Minor Release 4.2 & SWIFT Standard Release 2020

  • TEST October 30th, 2020, PROD November 21st, 2020
  • 8 Change Requests

November 29th, 2019 8

CR Number CR Description Document T2S-0654-URD T2S Penalty Mechanism Link T2S-715-URD Optimisations to the T2S Penalty Mechanism’s (CR654)user requirements Link T2S-0684-SYS Handling for outbound messages with amounts exceeding 15 digits Link T2S-0695-SYS Trade date to become mandatory within a settlement instruction (sese.023) Link T2S-0703-SYS Camt.050 exchanged between T2S and CLM Link T2S-0713-SYS Alignment of T2S Messages with ISO Maintenance Release 2018 - 2019 Link T2S-0702-SYS T2-T2S Consolidation and ECMS will require an internal communication within the consolidated platform Link T2S-0718-URD Daily provision of Euro Foreign Exchange Rates for the penalty mechanism Link

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SLIDE 9
  • 3. Report User Committee
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SLIDE 10
  • 3. Report 5th Meeting of the User Committee

(1/1)

  • Meeting took place on November 14th, 2019

Agenda:

  • 1. Business Facts & Figures
  • 2. Update on projects and activities of OeKB CSD
  • 3. Shareholder Rights Directive
  • 4. Miscellaneous
  • Meeting Protocols will be available on My OeKB CSD – User Committee

November 29th, 2019 10

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SLIDE 11
  • 4. Settlement Discipline
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SLIDE 12
  • 4. Settlement Discipline

(1/12)

Measures offered by OeKB CSD to prevent Settlement Fails

  • Real-time matching
  • Tolerance level
  • Bilateral cancellation facility
  • Hold and release mechanism
  • Recycling of failed settlement instructions
  • Partial settlement
  • …

OeKB CSD already offers these measures to its participants.

November 29th, 2019 12

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SLIDE 13
  • 4. Settlement Discipline

(2/12)

Calculation of Penalties

  • OeKB CSD will calculate cash penalties for each (free of or against payment)

settlement instruction that:

  • failed to settle on its intended settlement date (SEFP); or
  • matched after its intended settlement date (LMFP).
  • The calculation will be done on a daily basis for each business day that a instruction

fails to settle after its Intended Settlement Date (ISD).

  • Concerned securities
  • CSD-eligible MiFID/R securities ("virtually all securities"),
  • traded on an EU-trading platform or cleared by an EU-CCP.

Excluded are shares whose main trading platform is outside of the EU.

November 29th, 2019 13

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  • 4. Settlement Discipline

(3/12)

Calculation of Penalties

  • reference price ("Most relevant Market" or "Highest Turnover" in accordance with ESMA FIRDS DB)
  • type of security (CFI)
  • penalty = penalty rate * reference price * units/nominals

November 29th, 2019 14

Penalty Rate – simplified outline shares, liquid 1.0 BP shares, illiquid 0.5 BP shares, growth market 0.25 BP government bonds, provinces, central banks, multilateral development banks, EFSF, ESM, … 0.1 BP

  • ther bonds

0.2 BP bonds, growth market 0.15 BP

  • ther

0.5 BP lack of cash

  • vernight reference rate of the particular central bank (>0)
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SLIDE 15
  • 4. Settlement Discipline

(4/12)

Daily Settlement Fails Reports

OeKB CSD will provide a "new settlement fails penalties report" and a "modified settlement fails penalties report" on a daily basis:

  • T2S-DCPs: SWIFT semt.044 or flat file
  • preliminary version of the description of flat file available here
  • reporting of new penalties – will be sent by 11:30 a.m. CET
  • reporting of modified penalties – will be sent by 12:00 a.m. CET
  • T2S-ICPs: SWIFT MT537
  • draft version of the description available in the near future
  • Settlement Client
  • GUI (including Excel downloads)

November 29th, 2019 15

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  • 4. Settlement Discipline

(5/12)

Overview of the First Month

November 29th, 2019 16

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  • 4. Settlement Discipline

(6/12)

Monthly Aggregated Amounts Report

OeKB CSD will provide a "monthly aggregated amounts report": Sum up of all cash penalties for each participant (party BIC), per currency and counterparty.

  • T2S-DCPs: SWIFT semt.044 or flat file
  • preliminary version of the description of flat file available here
  • will be sent by 12:45 a.m. CET on the 14th business day of the month
  • T2S-ICPs: SWIFT MT537
  • draft version of the description available in the near future
  • Settlement Client
  • GUI & Excel downloads
  • sum per customer reference
  • net aggregated amount for PFOD

November 29th, 2019 17

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  • 4. Settlement Discipline

(7/12)

Overview of the Month Following the Settlement Fails

November 29th, 2019 18

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  • 4. Settlement Discipline

(8/12)

Monthly Appeal Period

  • Appeals may be lodged by participants for important reasons at any time during the

calendar month, as from the moment of computation and reporting of the penalty, and until (and including) the 10th business day of the following month.

  • Each time that an appeal is accepted and a change is applied to a penalty, it will be

reported on the following business day.

November 29th, 2019 19

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  • 4. Settlement Discipline

(9/12)

Monthly Payment (Collection & Distribution)

  • On the 17th business day of the following month, OeKB CSD will collect and distribute the penalties net

aggregated amounts  one booking per participant (party BIC).

  • Ahead of the 17th business day, OeKB CSD will create PFOD instructions to receive the cash amounts

from its participants that have to pay a net aggregated amount. OeKB CSD participants must have adequately funded their DCA, in order for the PFOD to timely settle on the 17th business day. The PFOD settlement will

  • debit the OeKB CSD participants’ DCA and a
  • credit OeKB CSDs’ DCA.
  • Ahead of the 17th business day, OeKB CSD will create PFOD instructions to pay the cash amounts to

participants that will receive a net aggregated amount. The PFOD settlement will

  • debit OeKB CSDs’ DCA and a
  • credit the OeKB CSD participants’ DCA.

November 29th, 2019 20

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  • 4. Settlement Discipline

(10/12)

Moving target

  • Enters into force on September 14th, 2020  postponement possible
  • Art.19 of Regulatory Technical Standards (RTS) on Settlement Discipline
  • CCPs have to collect penalties from and distribute penalties to their Clearing Members
  • EACH seeks to convince European Commission to allow the respective CSD to collect and distribute

penalties also for the settlement fails of CCPs and their Clearing Members

November 29th, 2019 21

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  • Infomail – Settlement Discipline #1:
  • slides
  • FAQs
  • draft version of the description MT537
  • Participant Meeting:
  • updates in 2020

November 29th, 2019 22

  • 4. Settlement Discipline

(11/12)

OeKB CSD Communication

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SLIDE 23

Any questions?

  • You can also send your questions to kurt.kerschbaum@oekb-csd.at at a later time.

November 29th, 2019 23

  • 4. Settlement Discipline

(12/12)

Q&A

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SLIDE 24
  • 5. T2/T2S Consolidation
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SLIDE 25
  • 5. T2/T2S Consolidation

(1/1)

  • A project of the Euro Central Banks
  • Go Live: November 2021
  • Aspects for OeKB CSD:
  • OeKB CSD will continue to offer conversion of statements of accounts (camt.053 from T2S-DCA into

MT940) for its participants.

  • Collection and distribution of income will continue to take place on T2S-DCAs.

November 29th, 2019 25

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  • 6. Project Shareholder Rights Directive
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SLIDE 27
  • 6. Project Shareholder Rights Directive

(1/9)

SRD II in a Nutshell

November 29th, 2019 27

  • Shareholders Rights Directive II (EU) 2017/828

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32017L0828

  • Implementing Regulation (EU) 2018/1212

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32018R1212

  • National (Austrian) Implementation

https://www.parlament.gv.at/PAKT/VHG/XXVI/I/I_00624/index.shtml

Top left hand quadrant: Topics concerning all Intermediaries, including CSDs

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  • a. Shareholder Identification (SI)

"Who owns my shares?"

  • b. Information on General Meetings (IGM)
  • c. Information on other Corporate Actions (ICA)
  • d. Proxy Voting (PV)

November 29th, 2019 28

Shares admitted to trading on a regulated market within EU deposited with OeKB CSD as Issuer CSD

  • 6. Project Shareholder Rights Directive

(2/9)

Four Scope Items for our Community (OeKB CSD as Issuer CSD)

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2nd Int.

  • 6. Project Shareholder Rights Directive

(3/9)

  • a. Shareholder Identification

November 29th, 2019 29

Issuer (or Agent) Shareholder C2 Shareholder C1 Shareholder E

(less than 0.5%)

Shareholder B Shareholder A CSD (as Issuer CSD) 1st Int. Intermediary A Intermediary X nth Int. Intermediary B Intermediary Y Intermediary Z Request 1 2 3 2 3 2 Response Response:

  • ISO 20022 based
  • Total balance of all account holders (of ISIN)
  • List of account holders, including balances
  • f individual accounts (downstream)
  • List of own accounts held with other

intermediaries, including balances and kind

  • f holding (upstream)

3 3 3 4 4 4 Request:

  • ISO 20022 based
  • Specific to a single ISIN
  • Issued by the issuer himself

(or an appointed agent)

1 2

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2nd Int.

  • 6. Project Shareholder Rights Directive

(4/9)

  • b. Information on General Meetings

November 29th, 2019 30

Issuer (or Agent) Shareholder C2 Shareholder C1 Shareholder E

(less than 0.5%)

Shareholder B Shareholder A CSD (as Issuer CSD) 1st Intermediary Intermediary A Intermediary X nth Int. Intermediary B Intermediary Y Intermediary Z 1 2 2 Information Message is:

  • ISO20022 based

and

  • provided on GUI (Asset Servicing

Client)

3 3 3 4 Information Message is:

  • ISO20022 based
  • r
  • entered via GUI (based on 20022)
  • … but design yet to be finalized

4 4 4 4 1 2

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2nd Int.

  • 6. Project Shareholder Rights Directive

(5/9)

  • c. Information on Corporate Actions

November 29th, 2019 31

Issuer (or Agent) Shareholder C2 Shareholder C1 Shareholder E

(less than 0.5%)

Shareholder B Shareholder A CSD (as Issuer CSD) 1st Intermediary Intermediary A Intermediary X nth Int. Intermediary B Intermediary Y Intermediary Z 1 2 2 Information Message is:

  • ISO15022 based

and

  • provided on GUI (Asset Servicing

Client)

3 3 3 4 Information Message is:

  • ISO15022 based
  • r
  • entered via GUI (based on 15022)
  • … but design yet to be finalized

4 4 4 4 1 2

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Mon, August 31st Live System Online

  • Connectivity Test
  • Smoke Test
  • 6. Project Shareholder Rights Directive

(6/9)

SRD II, Tentative Roll-Out Timeline OeKB CSD

November 29th, 2019 32

2019 2020

Thu, September 3rd Directive in Effect in EU Mon, August 3rd Participant Testing

  • Connectivity Testing
  • Data Format Testing
  • Processes and Timing

Wed, April 8th Final Specification

  • SI: ISO20022
  • IGM: GUI+ISO20022
  • ICA: GUI+ISO15022

4 months

Wed, March 4th Draft Specification

  • SI: ISO20022
  • IGM: GUI+ISO20022
  • ICA: GUI+ISO15022

March, to be announced Discussion of Draft

  • Review
  • Feedback
  • Changes

6 months

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  • 6. Project Shareholder Rights Directive

(7/9)

SRD II, Status on National Level

November 29th, 2019 33

Börsegesetz 2018, BGBl. I No. 107/2017, last amended by Bundesgesetz BGBl. I No. 776/2019, is amended as follows (July 2019) https://www.parlament.gv.at/PAKT/VHG/XXVI/I/I_00624/index.shtml  The legal framework in Austria has been finished in summer 2019. Cornerstones of the Austrian national implementation:

  • Minimum threshold of 0.5%. Below this threshold a holding is not to be reported.
  • The issuer can be charged with cost incurred by compliance with the regulation – within reasonable limits.
  • Exemption of SRD II related reporting from the so called "Bankgeheimnis" i.e. banking secrecy
  • The implementation of the rules comes into effect with Sept. 3rd, 2020 (latest possible deadline)
  • Non-compliance with the regulation leads to a penalty of Euro 25,000.-- per case.
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  • 6. Project Shareholder Rights Directive

(8/9)

SRD II, Stakeholders (in alphabetical order)

November 29th, 2019 34

  • Aktienforum
  • Bankenverband
  • CANIG - Corporate Actions National Implementation Group
  • CIRA
  • FMA
  • Intermediaries (Banks, OeKB CSD)
  • Issuers
  • Service Providers (e.g. Information Brokers)
  • Shareholders
  • WKO
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  • 6. Project Shareholder Rights Directive

(9/9)

Building Market Awareness

  • Intermediaries have built awareness among themselves quite early (platforms

Bankenverband and CANIG)

  • Building similar awareness regarding Issuers remains an important task

past conferences, meetings:

  • Aktienforum (September 2019)
  • C.I.R.A. Jahreskonferenz (October 2019)

planned:

  • C.I.R.A. Special Day January 15th, 2020
  • …

November 29th, 2019 35

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  • 7. AOB
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Thank you for your kind attention!