RA ID : CHANGE REQUEST. A. Origin of the request:

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1 ISO Change Requests in the context of the T2S Change Requests 587, 600 and 607 (CRG is invited to provide additional business scenarios to spport the ISO CRs if required below) RA ID : A. Origin of the request: CHANGE REQUEST FOR THE UPDATE OF ISO FINANCIAL REPOSITORY ITEMS A.1 Submitter: - Deutsche Bundesbank, on behalf of the Eurosystem - TARGET2-Securities Project A.2 Contact person: - Joachim Boening / Alexander Topel / T2S-FAM@bundesbank.de A.3 Sponsors: - Euroclear; - European Central Bank; Karen Birkel - karen.birkel@ecb.int - TARGET2-Securities Community B. Related messages: - semt SecuritiesSettlementTransactionAllegementReportV05 - sese SecuritiesSettlementTransactionAllegementNotificationV05 C. Description of the change request: Some of the ISO transaction codes used in an incoming Settlement Instruction are not included in the subsequent related outbound/inbound ISO messages and reports. In addition, there is one missing ISO transaction code in the Settlement Instruction when compared with the subsequent related outbound/inbound ISO messages and reports. Hence, the SecuritiesTransactionType7Code data type used for the sese.023 message (Securities Settlement Transaction Instruction) is inconsistent and is not aligned with the data types used for the subsequent related outbound/inbound ISO messages and reports. Certain ISO transaction codes of the sese.023 are not included in the allegement-related messages The following ISO transaction codes which are included in the list of valid transaction codes in the incoming Settlement Instruction are not in the scope of the sese.028 message (Securities Settlement Transaction Allegement Notification) and semt.019 message (Securities Settlement Transaction Allegement Report). ISO CR_Alignment of ISO Transaction Codes (T2S CR-587)_v01 Page 1 Page 1 of 18

2 The SecuritiesTransactionType10Code (used in semt.019 & sese.028) should be enriched with the following codes. Securities Transaction type codes Borrowing Reallocation [SBRE] Depository Receipt Conversion [CONV] Depository Receipt Release Cancellation [RELE] Factor Update [FCTA] Issuance [ISSU] Lending Reallocation [SLRE] Mark Down [MKDW] Mark Up [MKUP] Move Of Stock [INSP] Non Syndicated [NSYN] Return Delivery Without Matching [RODE] Sell Buy Back [SBBK] Syndicate Underwriters [SYND] TBA Closing [TBAC] Withdrawal [REDI] Definition Internal reallocation of a borrowed holding from one safekeeping account to another Relates to a depository receipt conversion. Relates to a release (into/from local) of depository receipt operation. Relates to a factor update Relates to the issuance of a security such as equity or a depositary receipt. Internal reallocation of a holding on loan from one safekeeping account to another. Relates to the decrease of positions held by an ICSD at the common depository due to custody operations (repurchase, pre-release, proceed of corp. event realigned). Relates to the increase of positions held by an ICSD at the common depository due to custody operations (repurchase, pre-release, proceed of corporate event realigned). Relates to a movement of shares into or out of a pooled account Relates to the issue of medium and short term paper (CP, CD, MTN, notes...) under a program and without syndication arrangement Relates to the return of financial instruments resulting from a rejected delivery without matching operation. Relates to a sell buy back transaction. Relates to the issue of financial instruments through a syndicate of underwriters and a lead manager Relates to a To Be Announced (TBA) closing trade Relates to the withdrawal of specified amounts from specified subaccounts When an unmatched Settlement Instruction is sent with one of the above transaction codes, the corresponding allegement sese.028 message (Securities Settlement Transaction Allegement Notification) is not sent to the counterparty. As a result, the Settlement Instruction may remain pending and unmatched without the counterparty being informed and no counterparty leg. It is also worth mentioning that the exclusion of these transaction codes in the allegement message was based on the assumption that the above codes will always be used in pre-matched Settlement Instruction. This however, seems to be an incorrect assumption in the new context of T2S (where bilateral matching is now required as a standard market practice) and therefore a correction is needed to include the missing transaction codes for the data type SecuritiesTransactionType10Code used in sese.028 allegement message and semt.019 allegement report messages. ISO CR_Alignment of ISO Transaction Codes (T2S CR-587)_v01 Page 2 Page 2 of 18

3 D. Purpose of the change: The purpose of this change is the alignment of transaction code lists across various messages. This alignment would allow the different market participants to use the dedicated transaction codes harmonised across the different messages. E. Urgency of the request: We request the SEG to consider this change request for the next maintenance cycle. F. Business examples: Comment [JB1]: Please review and/or complement. The reasons behind are both from a general and specific business natures When a range of values is defined for a given data in ISO messages, it should be the same across all messages. Managing different sets of values for the same data is a source of complexity and of errors for end users The choice to instruct with matching or without matching, with internal or external counterparts should be left at the discretion of the user, regardless of the ISO transaction code. Current rule results in restrictions in the usage of related ISO codes. Some clients indicated that they use default ISO codes (such as TRAD) because of this rule, while they would have preferred to use the appropriate ISO code to ease reconciliation This change becomes more critical in the context of T2S adaptation. T2S business rules make it mandatory to use matching with external counterparties. Existing scenarios where the user can transfer securities without matching to a counterpart using such ISO codes cannot continue with T2S. As far as business scenarios are concerned, hereafter some scenarios that imply the use of these ISO codes in to be matched instructions with external counterparties. Most of them relate to issuance situations e.g. o the issuer agent issues securities (by debiting dedicated issuance account) and delivers them onward with matching to a counterpart through a single instruction (ISO codes ISSU, MKUP) o same process may apply in the context of new issues / Primary market distribution (ISO codes NSYN, SYND) ISO CR_Alignment of ISO Transaction Codes (T2S CR-587)_v01 Page 3 Page 3 of 18

4 o in the context of Depositary Receipts conversion instruction by the DR agent can be linked to the delivery of DRs to a holder (CONV code) request of cancellation can be linked to the delivery of DRs to the DR agent (ISO code RELE) ISO CR_Alignment of ISO Transaction Codes (T2S CR-587)_v01 Page 4 Page 4 of 18

5 G. SEG recommendation: This section is not to be taken care of by the submitter of the change request. It will be completed in due time by the SEG(s) in charge of the related ISO messages. Consider Timing - Next yearly cycle: 2016/2017 (the change will be considered for implementation in the yearly maintenance cycle which starts in 2016 and completes with the publication of new message versions in the spring of 2017) - At the occasion of the next maintenance of the messages (the change will be considered for implementation, but does not justify maintenance of the messages in its own right will be pending until more critical change requests are received for the messages) - Urgent unscheduled (the change justifies an urgent implementation outside of the normal yearly cycle) - Other timing: Comments: Reject Reason for rejection: ISO CR_Alignment of ISO Transaction Codes (T2S CR-587)_v01 Page 5 Page 5 of 18

6 A. Origin of the request: CHANGE REQUEST FOR THE UPDATE OF ISO FINANCIAL REPOSITORY ITEMS A.1 Submitter: - Deutsche Bundesbank, on behalf of the Eurosystem - TARGET2-Securities Project A.2 Contact person: - Joachim Boening / Alexander Topel / T2S-FAM@bundesbank.de A.3 Sponsors: - European Central Bank; Karen Birkel - karen.birkel@ecb.int - TARGET2-Securities Community B. Related messages: - semt IntraPositionMovementStatusAdviceV04 - semt IntraPositionMovementPostingReportV05 - semt SecuritiesTransactionPostingReportV06 - semt SecuritiesTransactionPendingReportV07 - sese SecuritiesSettlementTransactionStatusAdviceV07 - sese SecuritiesSettlementTransactionGenerationNotificationV06 C. Description of the change request: Currently T2S actors are informed through sese.024 and semt.014 messages in real time about the status of their settlement instructions/restrictions, including timestamps for acceptance (SF1) and matching (SF2). However, the accepted (SF1) and/or matched (SF2) timestamps are not directly reported in a dedicated field and T2S actors are only provided with the timestamp of the generation of the status message sese.024 and semt.014. Similarly, the reports typically requested at the end of day, statement of transactions/settled intra position movements (semt.017/semt.016) and statement of pending instructions/intra position movements (semt.018/semt.034) as well as ad hoc queries which provide information on settlement instructions and settlement restrictions on securities. ISO CR_Addition of SF1 and SF2 (T2S CR-600)_v01 Page 1 Page 6 of 18

7 The messages should be enhanced to provide the accepted and matched timestamp of settlement instructions and the accepted timestamp of the settlement restrictions on securities. The following means have been identified to address this requirement: 1. Inclusion of accepted and matched timestamps in the message schema of status advice messages for settlement instructions and only accepted timestamp for settlement restriction on securities. - Securities Settlement Transaction Status Advice (sese.024) - Intra Position Movement Status Advice (semt.014) 2. Inclusion of accepted and matched timestamps in the message schema of generation notifications for T2S generated settlement transactions - Securities Settlement Transaction Generation Notification (sese.032) 3. Enhancement in reporting in order to retrieve the necessary accepted and matched timestamp of settlement instructions and only accepted timestamp for settlement restrictions on securities - Securities Transaction Posting Report (semt.017) and Securities Transaction Pending Report (semt.018) - Intra Position Movement Posting Report (semt.016) The timestamps should be included as optional fields at the following message-paths: - semt.014 Intra Position Movement Status Advice Document/IntraPosMvmntStsAdvc/Prcgsts/AckdAccptd/DtTm SF2 not required as there is no matching for Intra Position Movements - semt.016 Statement of posted intra position movements Document/IntraPosMvmntPstngRpt/FinInstrm/SubBal/IntraPosMvmnt/StsAndRsn/InstrPrcgSts/ AckdAccptd/DtTm SF2 not required as there is no matching for Intra Position Movements - semt.017 Statement of transactions Document/SctiesTxPstngRpt/FinInstrmDtls/Tx/TxDtls/AckdAccptd/DtTm Document/SctiesTxPstngRpt/FinInstrmDtls/Tx/TxDtls/Mtchd/DtTm - semt.018 Statement of pending Instructions Document/SctiesTxPdgRpt/Sts/StsAndRsn/InstrPrcgSts/AckdAccptd/DtTm Document /SctiesTxPdgRpt/Sts/StsAndRsn/MtchgSts/DtTm Document /SctiesTxPdgRpt/txs/StsAndRsn/InstrPrcgSts/AckdAccptd/DtTm Document /SctiesTxPdgRpt/txs/StsAndRsn/MtchgSts/DtTm - sese.024 Securities Settlement Transaction Status Advice Document/SctiesSttlmTxStsAdvc/Prcgsts/AckdAccptd/DtTm Document/SctiesSttlmTxStsAdvc/Mtchd/DtTm - sese.032 settlement instruction status advice Document/SctiesSttlmTxGnrtnNtfctn/StsAndRsn/Prcgsts/AckdAccptd/DtTm Document/SctiesSttlmTxGnrtnNtfctn/StsAndRsn/MtchgSts/DtTm Comment [JB1]: Here and in the following: Should we use the ISODateTime? Comment [JB2]: Alternative Proposal: Document/IntraPosMvmntPstngRpt/FinInst rm/subbal/intraposmvmnt/ackdaccptd/dt tm Comment [JB3]: To be reviewed by SWIFT as the Mtchd tag is the last one and by itself indicates the matched status. We do not know if adding list nested tag how the matched status will be reported. Comment [JB4]: To be reviewed by SWIFT as the Mtchd tag is the last one and by itself indicates the matched status. We do not know if adding list nested tag how the matched status will be reported. ISO CR_Addition of SF1 and SF2 (T2S CR-600)_v01 Page 2 Page 7 of 18

8 D. Purpose of the change: The business case for enhancing the reporting functionalities of T2S regarding the Accepted and Matched is strongly reinforced by record keeping requirements coming from the CSD Regulation, which requires CSDs to maintain and keep updated a record of all transactions including information regarding these timestamps. Reference to this specific requirement can be found in ESMA s Regulatory Technical Standards (RTS) on CSD Requirements under CSDR, Article 54, Transaction/Settlement Instruction (Flow) Records, points (g), (h), and (i) 1. E. Urgency of the request: We request the SEG to consider this change request for the next maintenance cycle. F. Business examples: Change1: Inclusion of accepted and/or matched timestamps in the sese.024 and accepted timestamp in the semt.014 message schema This option encompasses change in the message schema of sese.024 (Securities Settlement Transaction Status Advice) and semt.014 (Intra Position Movement Status Advice) to indicate the accepted and matched timestamp in the status advice message (only accepted status exists for Intra Position Movement status advice). It is necessary because the timestamp provided in the head.001 of the related sese.024/semt.014 is not reflecting the SF1 and SF2 timestamp but the time at which the complete message made up by the payload and the Business Application Header is generated. Comment [JB5]: A general, more business oriented description/example might be added to ease the discussions at ISO-level. This might be provided by the T2S CRsubmitter? Change 2: Inclusion of accepted and/or matched timestamps in the sese.032 schema In case of T2S generated settlement instructions, CSDs do not necessarily receive status advice messages. Instead, they receive generation notifications, which is sese.032 (Securities Settlement Transaction Generation Notification) in case of realignments and auto-collateralisation instructions. This option encompasses changes in the message schema of the sese.032 message, to indicate the accepted and matched timestamp in the generation notifications. It is necessary because the timestamp provided in the head.001 of the related sese.032 is not reflecting the SF1 and SF2 timestamp but the time at which the complete message made up by the payload and the Business Application Header is generated. Change 3: Enhancement in reporting in order to retrieve the necessary accepted and matched timestamp of settlement instructions and accepted timestamp of settlement restrictions on securities. Considering that the CSDs request for end of day reports via Statement of Transactions (semt.017), Statement of Pending Instructions (semt.018) and Intra Position Movement Posting Report (semt.016), this option enhances these reports to provide the accepted and/or matched timestamp of 1 _csdr_ts_on_csd_requirements_and_internalised_settlement.pdf ISO CR_Addition of SF1 and SF2 (T2S CR-600)_v01 Page 3 Page 8 of 18

9 the reported settlement instructions and the accepted timestamp of settlement restrictions on securities. Following fields are required in semt.017, semt.018 and semt.016 message structure for reporting the accepted and matched timestamp of the reported settlement instructions and only the accepted timestamp of the reported settlement restrictions on securities. The fields are optional and to be filled by T2S for relevant settlement instructions and settlement restrictions on securities which are accepted and/or matched in T2S. ISO CR_Addition of SF1 and SF2 (T2S CR-600)_v01 Page 4 Page 9 of 18

10 SEG recommendation: This section is not to be taken care of by the submitter of the change request. It will be completed in due time by the SEG(s) in charge of the related ISO messages. Consider Timing - Next yearly cycle: 2016/2017 (the change will be considered for implementation in the yearly maintenance cycle which starts in 2016 and completes with the publication of new message versions in the spring of 2017) - At the occasion of the next maintenance of the messages (the change will be considered for implementation, but does not justify maintenance of the messages in its own right will be pending until more critical change requests are received for the messages) - Urgent unscheduled (the change justifies an urgent implementation outside of the normal yearly cycle) - Other timing: Comments: Reject Reason for rejection: ISO CR_Addition of SF1 and SF2 (T2S CR-600)_v01 Page 5 Page 10 of 18

11 CHANGE REQUEST FOR THE UPDATE OF ISO FINANCIAL REPOSITORY ITEMS A. Origin of the request: A.1 Submitter: - Deutsche Bundesbank, on behalf of the Eurosystem - TARGET2-Securities Project A.2 Contact person: - Joachim Boening / Alexander Topel / T2S-FAM@bundesbank.de A.3 Sponsors: - European Central Bank; Karen Birkel - karen.birkel@ecb.int - TARGET2-Securities Community B. Related messages: - sese SecuritiesSettlementTransactionInstructionV06 - sese SecuritiesSettlementTransactionStatusAdviceV07 - sese SecuritiesSettlementTransactionAllegementNotificationV05 - semt SecuritiesTransactionPendingReportV07 - semt SecuritiesSettlementTransactionAllegementReportV05 C. Description of the change request: Currently, the transaction code BIYI (BuyIn) is not available consistently across ISO messages. To ensure a consistent usage of the code it is necessary to align some messages: - It is excluded from the valid ISO transaction codes list (SecuritiesTransactionType7Code) pertaining to sese.023 message (Securities Settlement Transaction Instruction) and the status advice sese.024 (Securities Settlement Transaction Status Advice), however it is available in the sese.025 (Securities Settlement Transaction Confirmation) based on ISO transaction codes list (SecuritiesTransactionType8Code). - It is excluded from the valid ISO transaction codes list (SecuritiesTransactionType10Code) pertaining to sese.028 (Securities Settlement Transaction Allegement Notification) and semt.019 (Securities Settlement Transaction Allegement Report). - It is excluded from the valid ISO transaction codes list (SecuritiesTransactionType9Code) pertaining to semt.018 message (Securities Transaction Pending Report), however it is ISO CR_Inclusion of code BIYI (T2S CR-607)_v01 Page 1 Page 11 of 18

12 available in semt.017 (Statement of Transactions) based on ISO transaction codes list (SecuritiesTransactionType8Code). With this CR it is requested to add the transaction code BIYI (Buy In) to the code lists - SecuritiesTranscactionType7Code, - SecuritiesTransactionType9Code and - SecuritiesTransactionType10 Code. D. Purpose of the change: During the discussions on the CSDR requirements, it has been identified that CSDs must keep record of settlement instructions related to buy-ins, including, if applicable, the amount of cash compensation and cancellation of initial settlement instructions. Reference to this requirement can be found in ESMA s Regulatory Technical Standards (RTS) on CSD Requirements under CSDR, Article 54, Transaction/Settlement Instruction (Flow) Records, point (x) and the corresponding Annex IV: Format of CSD records, Table 1, Transaction/settlement instruction (flow) records (row 24), that defines the actual format to be followed for each record1. In order for CSDs to identify buy-in transactions and be able to satisfy CSDR requirements related to buy-ins, it must be guaranteed that buy-in instructions information are identified, stored, and reported consistently across several messages: the usage of the ISO transaction type code BIYI (BuyIn) is proposed to fulfil this purpose. E. Urgency of the request: We request the SEG to consider this change request for the next maintenance cycle. 1 _csdr_ts_on_csd_requirements_and_internalised_settlement.pdf ISO CR_Inclusion of code BIYI (T2S CR-607)_v01 Page 2 Page 12 of 18

13 F. Business examples: BuyIn code BIYI is missing in SecuritiesTransactionType7Code, SecuritiesTransactionType9Code and SecuritiesTransactionType10Code but included in SecuritiesTransactionType8Code. SecuritiesTransactionType7Code Name CentralBankCollateralOperation BuyIn BuySellBack CollateralIn CollateralOut DepositoryReceiptConversion FactorUpdate MoveOfStock Issuance MarkDown MarkUp Netting NonSyndicated ExternalAccountTransfer InternalAccountTransfer PairOff Placement PortfolioMove Realignment Withdrawal Redemption DepositoryReceiptReleaseCancellation Repo ReturnDeliveryWithoutMatching ReverseRepo SellBuyBack BorrowingReallocation SecuritiesBorrowing SecuritiesLending Code CNCB BIYI BSBK COLI COLO CONV FCTA INSP ISSU MKDW MKUP NETT NSYN OWNE OWNI PAIR PLAC PORT REAL REDI REDM RELE REPU RODE RVPO SBBK SBRE SECB SECL ISO CR_Inclusion of code BIYI (T2S CR-607)_v01 Page 3 Page 13 of 18

14 LendingReallocation Subscription SyndicateUnderwriters TBAClosing Trade TripartyRepo TripartyReverseRepo Turnaround CorporateAction MarketClaim AutoCollateralisation ExchangeTradedFunds SLRE SUBS SYND TBAC TRAD TRPO TRVO TURN CORP CLAI AUTO ETFT SecuritiesTransactionType9Code Name CentralBankCollateralOperation BuyIn BuySellBack CollateralIn CollateralOut DepositoryReceiptConversion FactorUpdate MoveOfStock Issuance MarkDown MarkUp Netting NonSyndicated ExternalAccountTransfer InternalAccountTransfer PairOff Placement PortfolioMove Realignment Withdrawal Redemption Code CNCB BIYI BSBK COLI COLO CONV FCTA INSP ISSU MKDW MKUP NETT NSYN OWNE OWNI PAIR PLAC PORT REAL REDI REDM ISO CR_Inclusion of code BIYI (T2S CR-607)_v01 Page 4 Page 14 of 18

15 DepositoryReceiptReleaseCancellation Repo ReturnDeliveryWithoutMatching ReverseRepo SellBuyBack SecuritiesBorrowing SecuritiesLending Subscription SyndicateUnderwriters TBAClosing Trade TripartyRepo TripartyReverseRepo Turnaround AutoCollateralisation MarketClaim CorporateAction ExchangeTradedFunds RELE REPU RODE RVPO SBBK SECB SECL SUBS SYND TBAC TRAD TRPO TRVO TURN AUTO CLAI CORP ETFT SecuritiesTransactionType10Code Name CentralBankCollateralOperation BuyIn BuySellBack CollateralIn CollateralOut Netting ExternalAccountTransfer InternalAccountTransfer PairOff Placement PortfolioMove Realignment Redemption Repo ReverseRepo Code CNCB BIYI BSBK COLI COLO NETT OWNE OWNI PAIR PLAC PORT REAL REDM REPU RVPO ISO CR_Inclusion of code BIYI (T2S CR-607)_v01 Page 5 Page 15 of 18

16 SecuritiesBorrowing SecuritiesLending Subscription Trade TripartyRepo TripartyReverseRepo Turnaround AutoCollateralisation MarketClaim CorporateAction ExchangeTradedFunds SECB SECL SUBS TRAD TRPO TRVO TURN AUTO CLAI CORP ETFT SecuritiesTransactionType8Code Name CentralBankCollateralOperation BuyIn BuySellBack CollateralIn CollateralOut DepositoryReceiptConversion FactorUpdate MoveOfStock Issuance MarkDown MarkUp Netting NonSyndicated ExternalAccountTransfer InternalAccountTransfer PairOff Placement PortfolioMove Realignment Withdrawal Redemption DepositoryReceiptReleaseCancellation Code CNCB BIYI BSBK COLI COLO CONV FCTA INSP ISSU MKDW MKUP NETT NSYN OWNE OWNI PAIR PLAC PORT REAL REDI REDM RELE ISO CR_Inclusion of code BIYI (T2S CR-607)_v01 Page 6 Page 16 of 18

17 Repo ReturnDeliveryWithoutMatching ReverseRepo SellBuyBack BorrowingReallocation SecuritiesBorrowing SecuritiesLending LendingReallocation Subscription SyndicateUnderwriters TBAClosing Trade TripartyRepo TripartyReverseRepo Turnaround CorporateAction MarketClaim AutoCollateralisation ExchangeTradedFunds REPU RODE RVPO SBBK SBRE SECB SECL SLRE SUBS SYND TBAC TRAD TRPO TRVO TURN CORP CLAI AUTO ETFT ISO CR_Inclusion of code BIYI (T2S CR-607)_v01 Page 7 Page 17 of 18

18 G. SEG recommendation: This section is not to be taken care of by the submitter of the change request. It will be completed in due time by the SEG(s) in charge of the related ISO messages. Consider Timing - Next yearly cycle: 2016/2017 (the change will be considered for implementation in the yearly maintenance cycle which starts in 2016 and completes with the publication of new message versions in the spring of 2017) - At the occasion of the next maintenance of the messages (the change will be considered for implementation, but does not justify maintenance of the messages in its own right will be pending until more critical change requests are received for the messages) - Urgent unscheduled (the change justifies an urgent implementation outside of the normal yearly cycle) - Other timing: Comments: Reject Reason for rejection: ISO CR_Inclusion of code BIYI (T2S CR-607)_v01 Page 8 Page 18 of 18