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Settlement transaction types

BSBK: Buy Sell Back

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BSBK marks the settlement of a buy/sell-back: the party buys securities for cash now and agrees to sell them back at a fixed forward price. It is the cash provider’s side of the deal and is used on both legs.

Code
BSBK

What BSBK means

A buy/sell-back does the same economic job as a reverse repo but is booked as two outright trades: a spot purchase and a forward sale, with the forward price fixed when the deal is struck. Coupon income during the term is usually reflected in the forward price instead of being passed back separately. The cash provider flags both legs with BSBK.

The counterparty, which sells first and buys back later, uses SBBK. If the deal is a classic repo under a repo master agreement, the cash provider uses RVPO instead. Because both legs look like ordinary trades in the books, the BSBK code is often the only thing in the settlement message that tells the custodian the purchase is temporary.

When you see it

  • Start leg: an MT541 receive against payment with :22F::SETR//BSBK.
  • Forward leg: an MT543 deliver against payment with BSBK on the agreed forward date.

What to do next

  • Use BSBK on both legs when you provide the cash under a buy/sell-back, not TRAD. Under EU CSDR, CSDs report settlement fails per type of transaction (purchase or sale, collateral management, securities lending and borrowing, repo, other), and custodians such as BNY pass the instructed SETR code to the CSD for that reporting. A financing or collateral movement sent as TRAD lands in the wrong bucket.
  • In T2S markets the transaction type is not one of the matching fields, so the code on your instruction does not stop it matching. Some markets do match on it: Clearstream states that for KDPW (Poland) the SETR indicator is a mandatory matching criterion. There, agree the code with your counterparty, or both instructions stay unmatched with reason SETR (see unmatched settlement instructions).

Where it appears in MT and ISO 20022

MT (ISO 15022)

  • MT540, MT541, MT542 and MT543: sequence E (SETDET), field 22F, :22F::SETR//BSBK. The SETR qualifier is mandatory, so every instruction carries one code (format :4!c/[8c]/4!c; with a data source scheme a proprietary code may be sent instead).
  • Repeated in the confirmations MT544, MT545, MT546 and MT547 (sequence E, :22F::SETR//BSBK) and in the MT548 status advice (sequence B, where SETR is mandatory when the sequence is present).
  • Optional in the statements: MT536 subsequence B1a2 and MT537 subsequences B2b and C2.
  • Two-leg terms go in sequence D (block REPO) of MT540 to MT543: :98a::TERM closing date, :20C::SECO second-leg reference, :92A::REPO rate, :19A::TRTE termination amount.

MX (ISO 20022)

  • sese.023: SttlmParams/SctiesTxTp/Cd = BSBK (code list SecuritiesTransactionType23Code, unchanged in sese.023.001.09 to .013). SttlmParams/SctiesTxTp/Prtry carries a proprietary code instead.
  • Echoed in sese.024 at TxDtls/SttlmParams/SctiesTxTp/Cd and in sese.025 at SttlmParams/SctiesTxTp/Cd.
  • As one two-leg deal it can also be sent as sese.033 with TxTpAndAddtlParams/SctiesFincgTxTp = BSBK.