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Settlement transaction types

SBBK: Sell Buy Back

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

Code
SBBK

What SBBK means

In a sell/buy-back the cash taker sells securities spot and buys them back forward at a price set on the trade date. Economically it is close to a repo, but it is booked as two outright trades, so the settlement instructions need SBBK to show that the sale is temporary and the securities come back.

The cash provider on the other side uses BSBK. A cash taker under a repo agreement uses REPU. Treasury and funding desks choose between repo and sell/buy-back for documentation and accounting reasons; the settlement message should follow what was booked.

When you see it

  • Start leg: an MT543 deliver against payment with :22F::SETR//SBBK.
  • Forward leg: an MT541 receive against payment with SBBK.

What to do next

  • Use SBBK on both legs when you take cash under a sell/buy-back. 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//SBBK. 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//SBBK) 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 = SBBK (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 = SBBK.