Asset Services: Quality enhancements to benefit from better straight through processing
On
Monday 28 September 2015
as part of LuxCSD's ongoing commitment to the timeliness and quality of our services to customers, LuxCSD will implement quality enhancements to our existing services.
In response to customer requests, we have improved our notification processing to make it more efficient and to enable customers to benefit from better straight through processing (STP).
Some standard narrative text for specific corporate action events will be removed from the additional text (ADTX) in the notification for the below features:
- Dissenter’s rights;
- Pending trades; and
- Fees
Dissenter’s rights
In accordance with domestic laws, investors may be allowed the right to receive a cash payment for a fair value of their securities, in the event of a corporate action to which the investors do not consent.
Customers are informed of this right by a specific formatted tag in the notification (DISS - Dissenter's rights).
For risk management reasons, customers must communicate to Client Services their intention to make use of the dissenter's right feature immediately upon receipt of the relevant event notification and will be given all the pertinent information to perform their request to the company.
Clearstream Banking1 cannot be held responsible for any legal cost and fees incurred by dissenter investors pursuing this action.
Pending trades
For mandatory corporate action events, Clearstream Banking will cancel pending trades, whether the basis security code changes or not, and customers will have to input new trade Instructions taking the ratio into consideration. Stock exchange trades will be compensated if there is an ex-date in the event; in the absence of an ex-date, Clearstream Banking will cancel the transaction automatically.2
As an exception, on the UK and Canadian market, where there is a debit of original securities and a credit of other securities, trades matched in the market on ex-date will be effected by Clearstream Banking upon receipt of settlement confirmation from the depository. Unmatched trades will be cancelled and need to be reinstructed by the customer.
Fees
In accordance with domestic laws, investors may be required to pay certain fees, if appropriate, based on the corporate action type and terms (as a non exhaustive example, depository receipt fees may apply to mandatory, mandatory with choice and voluntary events).
Customers are informed of these fees, if applicable, in the relevant notification.
Further information
The LuxCSD Customer Handbook will be updated in due course.
For further information, customers may contact Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.
2. Transactions in CASCADE LION for underlying stock exchange trades will not be cancelled automatically; such transactions must be cancelled by the participants to the trade.