Clearing. User Guide June 2016 Version 1.5

Transcription

1 Clearing User Guide 6 22 June 2016 Version 1.5

2 CONTENTS 1. Introduction Document Purpose Intended Audience Document History Clearing Overview Off-Exchange Trades Overview Create Trades Field Descriptions OTC Trade Authorise / Reject OTC Trade Correction OTC Trade Cancellation Hold / Release Queries Overview Query On Exchange Trades Query OTC Trades Query Trade Allegements Position Management Overview Cash Settlement Instructions Security Settlement Instructions Settlement Instructions Settlement Overview Fund Settlement Instructions CLEARING 2 of 20

3 4.6.3 Security Settlement Instructions Settlement Instructions DISCLAIMER: THE INFORMATION CONTAINED IN THIS DOCUMENT IS A GUIDE ONLY. ALL PARTICIPANTS ON ANY NZX MARKET MUST COMPLY WITH THE RELEVANT RULES, AND THIS DOCUMENT IS NOT A SUBSTITUTE FOR THOSE RULES. NZX CLEARING WILL DETERMINE, IN ITS SOLE DISCRETION, WHETHER ANY PARTICIPANT OR POTENTIAL PARTICIPANT MEETS THE REQUISITE CRITERIA TO BECOME AND REMAIN A PARTICIPANT. THOSE WISHING EITHER TO TRADE IN ANY PRODUCTS AVAILABLE AT NZX OR TO OFFER AND SELL THEM TO OTHERS SHOULD CONSIDER BOTH THEIR LEGAL AND REGULATORY POSITION, INCLUDING THE RELEVANT RULES, AND THE RISKS ASSOCIATED WITH SUCH PRODUCTS BEFORE DOING SO. NO PART OF THIS PUBLICATION MAY BE REDISTRIBUTED OR REPRODUCED IN ANY FORM OR BY ANY MEANS OR USED TO MAKE ANY DERIVATIVE WORK WITHOUT WRITTEN PERMISSION FROM NZX CLEARING. NZX CLEARING (INCLUDING ITS PARENT COMPANY DIRECTORS, OFFICERS, EMPLOYEES AND CONTRACTORS) SHALL NOT BE LIABLE (EXCEPT TO THE EXTENT REQUIRED BY LAW) FOR THE USE OF THE INFORMATION CONTAINED HEREIN HOWEVER ARISING IN ANY CIRCUMSTANCES CONNECTED WITH ACTUAL TRADING OR OTHERWISE. NZX CLEARING IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS CONTAINED IN THIS PUBLICATION. THIS PUBLICATION IS FOR INFORMATION ONLY AND DOES NOT CONSTITUTE AN OFFER, SOLICITATION OR RECOMMENDATION TO ACQUIRE OR DISPOSE OF ANY INVESTMENT OR TO ENGAGE IN ANY OTHER TRANSACTION. ALL INFORMATION, DESCRIPTIONS, EXAMPLES AND CALCULATIONS CONTAINED IN THIS PUBLICATION ARE FOR GUIDANCE PURPOSES ONLY, AND SHOULD NOT BE TREATED AS DEFINITIVE. CLEARING 3 of 20

4 1. Introduction 1.1 Document Purpose The purpose of this document is to provide participants with information on how to use the Clearing module in the TCS BaNCS system via the font-end interface. It describes each of the functionalities available to users within the Clearing module and how to use this functionality. 1.2 Intended Audience This document is intended for use by Clearing & Settlement Participants. 1.3 Document History Version Date Nature of Amendment Aug-2008 Initial draft Oct-2008 Enlarge screenshots. Additional detail May-2009 Updates for May release Jul-2009 Changed screen shots for EXT2 region. Various other wording additions Dec-2009 Updated screen shots. Minor text updates Jun-2016 Updates for BaNCS V7 CLEARING 4 of 20

5 2. Clearing Overview The Depository and Clearing modules within the TCS BaNCS system are where the following functions can be performed: Enter, authorise and modify Off-Exchange (OTC) trades Query trades (On Exchange and OTC) Query settlement instructions (obligations) and standing instructions CLEARING 5 of 20

6 3. Off-Exchange Trades 3.1 Overview This function within the Depository module allows users to create off-exchange trades (OTC trades). Transactions for clearing and settlement reach the TCS BaNCS system via automated transfer from NZX s trading system. Off-exchange (OTC) trades which are not cleared and settled by the clearing house require manual entry into BaNCS. This is done via the Offexchange trade screen. All approved products can settle through the OTC settlement process. Settlement can be DvP (Delivery vs payment), or DfP (Delivery free of Payment). OTC transactions can be entered into the system at any time, either by SWIFT messaging or via screen based trade entry. Participants have the ability to create an authorising facility by selecting to activate the Maker/Checker flag. This flag is set at the Participant level (BP setup) by NZX Clearing and can be activated or de-activated at any time, depending on the Participant s preference. In addition, Participants have the ability to limit specific users to a maximum dollar amount for OTC trade creation and authorisation. The Authorisation Indicator flag is set at the Participant level (BP setup). This flag turns on the "amount based authorisation" function. The "amount based authorisation" function is set at the user level. "Amount based authorisation" applies to the creation or the authorisation of OTC trades, and limits the create and/or authorise abilities of that user to a settlement amount below what the "amount based authorisation" amount has been set at. If the flag if turned on, every user must have an amount based authorisation created for them otherwise the system will default the users authorisation level to zero. Matching Trades are matched by comparison. This means both buyer and seller must enter the trade to enable the trade to be accepted, matched and settled. The fields that are required to match are as follows: Seller BPID Buyer BPID Trade Date Settlement date and/or settlement cycle Instrument ID Trade quantity Securities Movement Type Payment Type Settlement amount CLEARING 6 of 20

7 Settlement currency Trade Status (should be in Accepted) Cum/Ex Indicator Non Mandatory field Common Trade Reference Non Mandatory field None of these fields will be able to have a null value. If the trade is not matched by the end of the settlement day, the status will changed to "Failed". 3.2 Create Trades The trade must be entered by both seller and buyer before it can be authorised. Screen based entry of OTC trades are entered by seller and buyer independently, through the Depository module as follows: 1) Select Depository from the Main Menu bar 2) Select Off-Market from the Menu Bar 3) Select the Create -> OTC Trade option from the Menu Bar to bring up the Create OTC Trade Screen 4) Complete details as required Yellow fields are mandatory 5) Click on the Release button Create OTC Trade screen When one leg of the trade is entered and authorisation is required, the trade will be in an Instructed status and cannot be viewed under the Query screen. If authorisation is not CLEARING 7 of 20

8 required, the trade will be in an Accepted status. A reference number is created when the trade is Accepted. Each leg of the trade has its own reference number. 3.3 Field Descriptions Field Name Instructing Party Securities Movement Type Payment Type Transaction Code Participant Reference Instrument ID Intended Settlement Date Settlement Quantity/Unit Trade Price Trade Date Settlement Cycle Settlement Amount Seller Details A/c Owner Seller Details A/c No Buyer Details A/c Owner Buyer Details A/c No Party Hold Description Can only be the users own BPID Deliver or receive Free or APMT (Against Payment) TRAD, OWNI or OWNE Unique Reference Enter ISIN of approved security Select settlement date Quantity of trade in units Unit price pertaining to trade Select date of trade Timing of settlement The total amount of the trade The seller s BPID The seller s account number. If user is not the seller, A/c is not required The buyer s BPID The buyer s account number. If user is not the buyer, A/c is not required Set to Hold if you want the trade held. This defaults to Released. 3.4 OTC Trade Authorise / Reject OTC trades entered by both buyer and seller with all details matching will be in a Matched Ready for Settlement status. If participants have elected to have trades authorised by a second user by activating the Maker/Checker function, the transaction needs to be authorised in the Check screen. The Maker of a trade cannot be the checker. OTC trades are authorised through the Depository module as follows: 1) Select Depository from the Main Menu bar 2) Select Off-Market from the Menu Bar CLEARING 8 of 20

9 3) Select the Check -> OTC Trade option from the Menu Bar to bring up the Check OTC Trade Screen 4) Select trade to authorise 5) Right click and select Authorise Check OTC Trade screen Users can also reject a trade if the details are not correct. To reject a trade, click on the Reject button instead of the authorise button. 3.5 OTC Trade Correction OTC trades that have been rejected need to be corrected in the Correct screen. Participants are able to amend their trade details if they have the Maker/Checker flag turned on. OTC trades are corrected through the Depository module as follows: 1) Select Depository from the Main Menu bar 2) Select Off-Market from the Menu Bar 3) Select the Correct -> OTC Trade option from the Menu Bar to bring up the Correct OTC Trade Screen 4) Select trade to authorise 5) Right click and select Display 6) Correct details as required and click on the Release button Correct OTC Trade screen CLEARING 9 of 20

10 Corrected trades must then be authorised again. The correcting user cannot perform the authorisation. 3.6 OTC Trade Cancellation Trades can be cancelled through the trade display screen. Trades can only be cancelled prior to settlement, and once matched can only be cancelled bi-laterally. To cancel an OTC trade: 1) Select Depository from the Main Menu bar 2) Select Off-Market from the Menu Bar 3) Select the Query -> OTC Trade option from the Menu Bar to bring up the Query OTC Trade Screen 4) Select trade to authorise 5) Right click and select Display 6) Click on the Cancel button Cancel OTC Trade 3.7 Hold / Release Trades can be held, or released from hold through the OTC Trade query screen. Holding a trade means a transaction will be held from settlement, pending the flag being switched to Released i.e. if a participant has insufficient product to settle the trade and is waiting on another delivery. Trades can be placed on hold during trade creation, or after trade creation but prior to settlement. When one leg of a matched trade is Held, the status of the trade will be Matched. When the hold is released, the trade status will change to Matched Ready for Settlement. To perform a Hold / Release after trade creation: 1) Select Depository from the Main Menu bar CLEARING 10 of 20

11 2) Select Off-Market from the Menu Bar 3) Select the Query -> OTC Trade option from the Menu Bar to bring up the Query OTC Trade Screen 4) Select trade to authorise 5) Right click and select Display 6) Click on the Hold-Release button to change the Hold/Release status Hold/Release OTC Trade CLEARING 11 of 20

12 4. Queries 4.1 Overview The query menu in the Depository and Clearing modules allows users to display the following: On Exchange Trades Off Exchange Trades (OTC) Trade Allegements Position Management o Cash Settlement Instructions o Security Settlement Instructions o Cash and Security Settlement Instructions Settlement Instructions o Cash Settlement Instructions o Security Settlement Instructions o Cash and Security Settlement Instructions 4.2 Query On Exchange Trades Trades that have been received into the system from the NZX Trading system via the automated trade transfer process can be queried in the On Exchange Trades query screen. On Exchange trades can be queried through the Clearing Module as follows: 1) Select Clearing from the Main Menu Bar 2) Select CCP Cash Clearing the Menu Bar 3) Select Trade from the Menu Bar 4) Select the Query -> Cash Trades option from the Menu Bar to bring up the Query Cash Trades Screen Users can then populate one or more parameters in the query screen then click on the Search button to view all their trades within the chosen parameters. Query Cash Trades screen CLEARING 12 of 20

13 Users can view details of each trade by selecting one of the rows displayed on the screen, then clicking on the Display button. Trade detail screen The possible statuses for exchange trades as follows: Accepted All Trades in BaNCS settling instruments will be in this status up until settlement, unless the trade has been cancelled Rejected Trade has failed validation in BaNCS and has been rejected Cancelled Trade has been cancelled on Day 0 or Day Query OTC Trades All OTC trades that have been entered into the system and have also been authorised can be queried from the Query OTC Trade screen. OTC trades are queried through the Depository module as follows: 1) Select Depository from the Main Menu bar 2) Select Off-Market from the Menu Bar 3) Select the Query -> OTC Trades option from the Menu Bar to bring up the Query OTC Trade Screen Users can choose to populate one or more parameters in the query screen then click on the Search button to view all their trades within the chosen parameters. Users can view details of each trade by selecting one of the trades displayed on the screen then clicking on the Display button. CLEARING 13 of 20

14 Query OTC Trade screen 4.4 Query Trade Allegements The Trade Allegement functionality allows participants to view OTC trades created by other parties, where the viewing participant is the counterparty. Trades can be viewed here on the day of settlement. This is a view only screen. Participants are still required to enter the trade for it to match in the system. Trade Allegements are queried through the Depository module as follows: 1) Select Depository from the Main Menu bar 2) Select Off-Market from the Menu Bar 3) Select the Query -> Trade Allegements option from the Menu Bar to bring up the Query Trade Allegements Screen Users can choose to populate one or more parameters in the query screen then click on the Search button to view all trades alleged to them by other participants, within the chosen parameters Query Trade Allegements screen CLEARING 14 of 20

15 4.5 Position Management Overview The Position Management query options allow users to query their current and future settlement obligations within a certain date range, prior to the settlement date. Options include cash and/or securities and deliver and/or receive obligations Cash Settlement Instructions Cash settlement instructions are queried through the Clearing module as follows: 1) Select Clearing from the Main Menu bar 2) Select CCP Cash Clearing from the Menu Bar 3) Select the Query -> Cash Settlement Instructions option from the Menu Bar to bring up the Cash Settlement Instructions Screen Users can choose to populate one of more parameters in the query screen then click on the Search button to view all their cash settlements within the chosen parameters. Cash settlement obligations are netted at the currency level. Cash Settlement Instructions screen Security Settlement Instructions Security settlement instructions are queried through the Clearing module as follows: 1) Select Clearing from the Main Menu bar 2) Select CCP Cash Clearing from the Menu Bar 3) Select the Query -> Security Settlement Instructions option from the Menu Bar to bring up the Cash Settlement Instructions Screen CLEARING 15 of 20

16 Users can choose to populate one or more parameters in the query screen then click on the Search button to view all their security settlements within the chosen parameters. Security settlement obligations are netted at an instrument level. Security Settlement Instructions screen Settlement Instructions Security and cash settlement instructions can be queried together, through the Clearing module as follows: 1) Select Clearing from the Main Menu bar 2) Select CCP Cash Clearing from the Menu Bar 3) Select the Query -> Settlement Instructions option from the Menu Bar to bring up the Security & Cash Settlement Instructions Screen Users can choose to populate one or more parameters in the query screen then click on the Search button to view all their security and cash settlements within the chosen parameters. Security and cash settlement obligations are netted at an instrument level. CLEARING 16 of 20

17 Security & Cash Settlement Instructions screen By clicking on a line and selecting the Individual Obligation button, a user can view the individual trades that make up the net obligation. Selecting Individual Obligation 4.6 Settlement Overview The Settlement query options allow users to query the status of their settlement obligations within a certain date range, on or after the settlement date. Options include cash and/or securities and deliver and/or receive obligations Fund Settlement Instructions Cash settlement instructions are queried through the Clearing module as follows: 1) Select Clearing from the Main Menu bar 2) Select Settlement from the Menu Bar CLEARING 17 of 20

18 3) Select the Query -> Fund Settlement Instructions option from the Menu Bar to bring up the Fund Settlement Instructions Screen Fund Settlement Instructions Screen Security Settlement Instructions Security settlement instructions are queried through the Clearing module as follows: 1) Select Clearing from the Main Menu bar 2) Select Settlement from the Menu Bar 3) Select the Query -> Security Settlement Instructions option from the Menu Bar to bring up the Security Settlement Instructions Screen Security Settlement Instructions Screen Settlement Instructions Security & Cash settlement instructions are queried through the Clearing module as follows: 1) Select Clearing from the Main Menu bar 2) Select Settlement from the Menu Bar 3) Select the Query -> Settlement Instructions option from the Menu Bar to bring up the Settlement Instructions Screen CLEARING 18 of 20

19 Settlement Instructions Screen CLEARING 19 of 20

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