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Settlement transaction types

TURN: Turnaround

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TURN marks a turnaround: the same security is bought from one broker and sold to another for settlement on the same day, so the receipt provides the securities for the delivery. Both instructions carry TURN and are linked.

Code
TURN

What TURN means

A turnaround happens when a manager buys and sells the same line for the same settlement date through different brokers, for example when a position is passed straight on or an order is reallocated. The account servicer has to settle the receipt first, or both together, so that the securities are there for the delivery. TURN tells it the two instructions belong together.

The receipt and the delivery point to each other in sequence A1 (Linkages), and the quantity to be turned can be given with :36B::TURN. Citi’s field 22F guide asks for :99B::TOSE (total of linked instructions) and :99B::SETT (current instruction number) in sequence A when TURN is used, and treats the instruction as not straight-through otherwise.

PAIR is different: a pair-off nets a trade against earlier trades so that only a difference settles, or nothing at all. NETT covers netting of settlement instructions in general, for example by a CCP. A single buy or sell is TRAD.

When you see it

  • As a linked MT541 receipt and MT543 delivery for the same ISIN and settlement date, with different counterparties.
  • In MT548 advices where the delivery is pending because the receipt has not settled yet, for example with reason AWSH or LACK.

What to do next

  • Send both legs with TURN and link them, so that the delivery can use the securities from the receipt. Without the link, the delivery may fail for lack of securities.
  • Some custodians never apply automatic partial settlement to this type: BNY lists SECL, SECB, SLRE, SBRE, OWNI, TURN and the repo codes among the transactions it always instructs with NPAR.
  • 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//TURN. 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//TURN) 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.

MX (ISO 20022)

  • sese.023: SttlmParams/SctiesTxTp/Cd = TURN (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.
  • sese.023 links the two legs in Lnkgs and can give the turned quantity in Lnkgs/LkdQty/TrndQty.

Questions

What is the difference between TURN and PAIR?
In a turnaround both trades settle: the securities come in from one broker and go out to another on the same day. In a pair-off the trades are netted against each other, so only the difference settles, or nothing.
How do I link a turnaround in MT541 and MT543?
Put :22F::SETR//TURN in sequence E of both messages, reference the other instruction in sequence A1 (Linkages), and give the turned quantity in :36B::TURN if your custodian wants it. Some custodians also ask for :99B::SETT and :99B::TOSE in sequence A.