18.09.2019

The European Central Bank (ECB) conducts annual T2S Insolvency Tests on the T2S customer test environment involving all participating CSDs and central banks, testing the process of an insolvency of T2S participants.

For this year, the test was performed on Tuesday, September 17th, 2019.

Keypoints:

  • Date: September 17th, 2019
  • Duration: 09:00 a.m. – 5:00 p.m.
  • Number of OeKB CSD participants: 1

Situation:

  • The insolvent participant of OeKB CSD is the legal owner of the T2S DCAs and of the securities accounts linked to him.
  • The insolvent participant of OeKB CSD is a Clearing Member.

Procedure & Aim:

The participant of OeKB CSD was reported to the ECB in the test assumption as insolvent.

Process for handling the insolvency of a OeKB CSD participant:

  1. Check if communication channels are working properly between the participant and OeKB CSD.
  2. Check if the participant is able to perform the insolvency activities on a timely manner.
  3. Check the impact of the clearing activities.

Test result:

OeKB CSD tested all necessary T2S process sequences in accordance with the T2S policies – the OeKB CSD participant sent defined test cases. OeKB CSD performed all communication sequences of the T2S insolvency procedures with the ECB as well as the technical steps in T2S successfully. The test cases of the participant were fulfilled according to the test assumption.

Extract from the T2S Manual of Operations:

No. 

Description 

Applicable rule for OeKB CSD

1 Transfer orders entered before the opening of insolvency proceedings.

No action to be taken (i.e. to be processed according to system rules).

2 Transfer orders entered after the opening of insolvency proceedings, which were matched on the T2S platform before the CSD/NCB becomes aware and for settlement on the same business day.

No action to be taken immediately. To be put on hold and cancelled if unsettled at the end of the day (i.e. bilateral cancellation applies).

3 Transfer orders entered after the opening of insolvency proceedings, which were matched on the T2S platform before the CSD/NCB becomes aware but for settlement later than on the day of insolvency.  To be put on hold and cancelled at the end of the day (i.e. bilateral cancellation applies).

To be put on hold and cancelled at the end of the day (i.e. bilateral cancellation applies).

4 Transfer orders entered after the opening of insolvency proceedings, which were not matched on the T2S platform by the time the CSD/NCB becomes aware.

To be immediately cancelled by CSD/NCB (alternatively put on hold for a later cancellation.

5 Transfer orders entered after the moment the CSD/NCB becomes aware of insolvency proceedings upon request of the insolvency liquidator.

To be processed according to system rules.

6 Transfer orders entered after the moment the CSD/NCB becomes aware of insolvency proceedings without involvement of the insolvency liquidator.

To be rejected.

Transparent Gif

Insolvency of CSD/participants in T2S
source: www.ecb.europa.eu

Any questions? Please contact us!

Accounts & Settlement Service Center
T +43 1 53127-2020
F +43 1 53127-4020
settlement@oekb-csd.at