Common use of GENERAL RECOMMENDATIONS Clause in Contracts

GENERAL RECOMMENDATIONS. In a substitution operation, the account owner instructs the account servicer to recall the collateral originally instructed and to replace it by other collateral. - Two messages should be sent on the seller side, one to receive back the original collateral and one to deliver the new one. They should be linked to each other using a linkage sequence with a PREV reference and a linkage indicator :22F::LINK//WITH. Indeed, it is important that both instructions settle simultaneously to avoid one party to be doubly exposed. - Two messages should be sent on the buyer side, one to deliver back the original collateral and one to receive the new one. They should be linked to each other using a linkage sequence with a PREV reference and a linkage indicator :22F::LINK//WITH. Indeed, it is important that both instructions settle simultaneously to avoid one party to be doubly exposed. - The two messages will be identified as part of a substitution transaction using the Repo Type indicator :22F::REPT//CADJ - The two messages will be linked to the original instruction using the Repo reference and/or a linkage sequence with the message reference of the original instruction. - It may happen that when the collateral substitution is instructed, the closing leg has not yet been instructed (e.g. open ended repo). See buyer message flow example. ⋅ If the closing leg instruction was already sent, the SWAP MT 540-542 instruction should also lead to the amendment of the closing leg to reflect the collateral change. The account owner should not have to cancel and replace the closing leg. ⋅ If the closing leg instruction was not sent yet, when it is eventually sent, it must reflect the repo details at the time it is sent, i.e. provide the correct collateral if it has been swapped. - Settlement confirmations will be sent for both receive and delivery instructions.

GENERAL RECOMMENDATIONS. In a substitution operation, the account owner instructs the account servicer to recall the collateral originally instructed and to replace it by other collateral. - Two messages should be sent on the seller side, one to receive back the original collateral and one to deliver the new one. They should be linked to each other using a linkage sequence with a PREV reference and a linkage indicator :22F::LINK//WITH. Indeed, it is important that both instructions settle simultaneously to avoid one party to be doubly exposed. - Two messages should be sent on the buyer side, one to deliver back the original collateral and one to receive the new one. They should be linked to each other using a linkage sequence with a PREV reference and a linkage indicator :22F::LINK//WITH. Indeed, it is important that both instructions settle simultaneously to avoid one party to be doubly exposed. - The two messages will be identified as part of a substitution transaction using the Repo Type indicator :22F::REPT//CADJ - The two messages will be linked to the original instruction using the Repo reference and/or a linkage sequence with the message reference of the original instruction. - It may happen that when the collateral substitution is instructed, the closing leg has not yet been instructed (e.g. open ended repo). See buyer message flow example. ⋅  If the closing leg instruction was already sent, the SWAP MT 540-542 instruction should also lead to the amendment of the closing leg to reflect the collateral change. The account owner should not have to cancel and replace the closing leg. ⋅  If the closing leg instruction was not sent yet, when it is eventually sent, it must reflect the repo details at the time it is sent, i.e. provide the correct collateral if it has been swapped. - Settlement confirmations will be sent for both receive and delivery instructions.

GENERAL RECOMMENDATIONS. ‌ In a substitution operation, the account owner instructs the account servicer to recall the collateral originally instructed and to replace it by other collateral. - Two messages should be sent on the seller side, one to receive back the original collateral and one to deliver the new one. They should be linked to each other using a linkage sequence with a PREV reference and a linkage indicator :22F::LINK//WITH. Indeed, it is important that both instructions settle simultaneously to avoid one party to be doubly exposed. - Two messages should be sent on the buyer side, one to deliver back the original collateral and one to receive the new one. They should be linked to each other using a linkage sequence with a PREV reference and a linkage indicator :22F::LINK//WITH. Indeed, it is important that both instructions settle simultaneously to avoid one party to be doubly exposed. - The two messages will be identified as part of a substitution transaction using the Repo Type indicator :22F::REPT//CADJ - The two messages will be linked to the original instruction using the Repo reference and/or a linkage sequence with the message reference of the original instruction. - It may happen that when the collateral substitution is instructed, the closing leg has not yet been instructed (e.g. open ended repo). See buyer message flow example. ⋅ If the closing leg instruction was already sent, the SWAP MT 540-542 instruction should also lead to the amendment of the closing leg to reflect the collateral change. The account owner should not have to cancel and replace the closing leg. ⋅ If the closing leg instruction was not sent yet, when it is eventually sent, it must reflect the repo details at the time it is sent, i.e. provide the correct collateral if it has been swapped. - Settlement confirmations will be sent for both receive and delivery instructions.