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Securities transfers for...

Introduction

In an Omnibus setup, clients are responsible for managing the individual end-user accounts and their corresponding First-in, First-out (FIFO) ledger data, as Upvest has no visibility on the end users.

For securities transfers related to an Omnibus account, Upvest’s role is limited to facilitating the Market Stage. In the market stage, the securities are physically moved. This process is generally the same for both incoming and outgoing transfers. Once the instructions are validated (“matched”) by both custodians, the assets are transferred. This is executed as a free-of-payment (FoP) transfer, which settles through a Central Securities Depository (CSD) such as Clearstream.

The client remains responsible for handling the transfer of the associated tax data.

Outgoing Transfers

For outgoing transfers, the process is expected to work "out of the box." Clients will instruct the transfer, and the system will execute it.

{
  "direction": "OUTGOING",
  "instrument_id": "US0378331005",
  "instrument_id_type": "ISIN",
  "quantity": "10",
  "transfer_type": "NO_OWNER_CHANGE",
  "user_id": "7e9a0529-d289-4f4a-ae01-c2cd013d582e",
  "account_id": "d396b7c3-aa67-488a-8e39-4a1a7cbeb9f4",
  "settlement_reference": "b82dc5985558fdr2",
  "counterparty": {
    "bic": "DUMBZZ33XXX",
    "account_number": "1234567891",
    "name": "Max Mustermann"
  },
  "place_of_settlement": "DAKVDEFFXXX",
  "trade_date": "2024-01-22",
  "settlement_date": "2024-01-23"
}

Incoming Transfers

For Incoming Transfers, clients align with the contrabroker and agree settlement instructions, including place of settlement (PSET), trade date, and settlement date, before submitting the transfer request to Upvest via API.

In this setup, the settlement process might not complete for the following reasons:

  • The place of settlement (PSET) differs for positions of the same ISIN. For example, some positions may reside in Clearstream Frankfurt with the rest in Clearstream Luxembourg.
  • Delays or mistakes from counterparty in Settlement Date. Clients must first agree on the settlement details with the contrabroker and then submit the data to Upvest. If there any delays or mistakes from the contrabroker, the agreed trade and settlement dates may differ. In this case, clients may not be able to update the transfer instruction.

When these scenarios occur:

  • Any communication and necessary adjustment with the contrabroker will be dealt with by Upvest.

  • Clients could include Upvest in any communication with the contrabroker prior to submitting the instruction, to ensure that Upvest is aware of any incoming transfer. This also helps in cases where the contrabroker doesn’t make use of allegements.

{
  "direction": "INCOMING",
  "instrument_id": "US0378331005",
  "instrument_id_type": "ISIN",
  "quantity": "10",
  "transfer_type": "NO_OWNER_CHANGE",
  "user_id": "7e9a0529-d289-4f4a-ae01-c2cd013d582e",
  "account_id": "d396b7c3-aa67-488a-8e39-4a1a7cbeb9f4",
  "settlement_reference": "b82dc5985558fdr2",
  "counterparty": {
    "bic": "DUMBZZ33XXX",
    "account_number": "1234567891",
    "name": "Max Mustermann"
  },
  "place_of_settlement": "DAKVDEFFXXX",
  "trade_date": "2024-01-22",
  "settlement_date": "2024-01-23"
}