Transaction management rules: Further enhancements
Clearstream Banking1 informs customers that on
24 June 2019
the transaction management process and reporting will be further enhanced to comply with CAJWG/CASG standards and with Issuer-CSD rules, if and when applicable.
Changes to market claims and reverse market claims
The event LIQU Partial Liquidation (without debit of the basis security) will be eligible for market claims and reverse market claims for all markets (including ECAG gross trades) and will be added to the MT564 Claim and Reversal Advice (CRA). This report is available upon subscription and covers all events eligible to compensation by Clearstream. It is provided via SWIFT, Xact File Transfer and Xact Web Portal. Customers have the possibility to update the events to be reported via Xact Web Portal or Creation Online.
Market claims detected but not subject to compensation by Clearstream Banking or the market will also be reported to customers via MT564.
Market claims with multiple proceeds where one proceed is non-T2S eligible for a transaction with a counterparty outside of CBL, CBF or LuxCSD, only the T2S eligible proceed will be compensated and accordingly reported with status compensated.
Changes to Transformations
The T2S CA Standards require that the generation of re-instructions is decoupled from the payment status of the corporate action event. The current Clearstream transformation process will be adapted as follows:
For internal and cross-border transactions in T2S securities, depending on the market practice, the re-instruction will be either generated:
- on Record date/Market deadline2 at end of day, provided the initial instruction has been successfully cancelled, regardless of the payment status of the related corporate action event (all T2S markets for Eurex Clearing trades and all T2S markets except Austria and Germany for LION and OTC trades); or
- when the corporate action event has been paid, provided the initial instruction has been successfully cancelled (non-T2S markets, Austria and Germany, not applicable to Eurex Clearing trades).
The following events processed with intermediate securities will be eligible for transformations for all markets applying such CA Standards:
- EXRI Bonus Rights, Subscription Offer,
- DVOP Choice Dividend,
- EXTM Extension Option.
The transformation of Eurex Clearing trades in securities subject to EXRI and DVOP events is subject to future communication.
Transformations detected but not subject to re-instruction by Clearstream will be reported to customers via MT54x.
Transformations with multiple proceeds where one proceed is non-T2S eligible:
- for a transaction with both counterparties in CBL, CBF or LuxCSD, the underlying transaction will be subject to cancellation and re-instructions will be generated for both T2S eligible and non-T2S eligible proceeds.
- for a transaction with a counterparty outside of CBL, CBF or LuxCSD, the underlying transaction will be subject to cancellation only with no re-instruction.
Cutover
From implementation date 24 June 2019, the above described changes will be applicable to both on-going and new market claim and transformation instructions.
Further information
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to 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, and 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.
2. Transformations for the T2S markets, Canada, Ireland and the UK are detected as of Market deadline or as of Effective date, if the Market Deadline is not applicable.
Transformations for the U.S. market are detected based on Effective date. If the Effective date is available, the underlying trade will be cancelled on Effective date minus 1 BD. If the Effective date is not available, the underlying trades will not be cancelled.