Further enhancements to transaction management rules- update
Note: This announcement originally published on 24 August 2018, has been amended to clarify information on counterparties, instruction types and cutover details to customers.
Effective
1 December 2018
LuxCSD1 informs customers that OneClearstream will further comply with the Issuer-CSD rules for each T2S market, driven by the T2S standards and adapt its current market claims and reverse market claims compensation processing as well as its transformations processing.
Compensation instructions for T2S securities (Market claim and reverse market claim)
For all trades in T2S securities, depending on the market practice, the compensation instruction is either generated:
- on record date end of day, regardless of the payment status of the related corporate action event (all T2S markets except Austria and Germany); or
- when the corporate action event has been paid if the underlying instruction is at least matched, or settled in case of a reverse market claim (non-T2S markets, Austria and Germany).
In both cases, the intended settlement date of the compensation is the payment date of the event.
Compensation instructions for proceeds not eligible in T2S
For cross-CSD trades with counterparties from non-Clearstream entities on all T2S markets, where the event’s cash or security proceed is not T2S eligible, Clearstream Banking2 will only perform the detection.
Note: For other trades (for example, intra-CSD), Clearstream Banking will still perform the detection and the compensation that will be paid to the corresponding ICSD account of the customer.
Transformations for proceeds not eligible in T2S
For cross-CSD trades with counterparties from non-Clearstream entities trades on all T2S markets, when the event’s cash or security proceed is not T2S eligible, Clearstream Banking will only perform the cancellation.
Note: For other trades (for example, intra-CSD), Clearstream Banking will still perform the cancellation and the re-instruction that will be paid to the corresponding ICSD account of the customer.
Multiple proceeds resulting from a corporate action (cash and securities)
The detection will always be done and the compensation instructions for multiple proceeds (cash and securities) will always be generated except for the markets where not applicable as indicated in the Market Link Guides.
The detection and cancellation for transformations will always be generated. The re-instruction will be generated as well except for the markets where not applicable as indicated in the Market Link Guides.
Market claim report statuses
The market claim lifecycle will be modified such as to ease the monitoring of compensations The list of market claim statuses will be updated as follows:
• Pending
• Awaiting local market feedback
• To be compensated
• Compensation created (New)
• Reversal created (New)
• Repayment created (New)
• Cancellation created (New)
• Expired
• Cancelled
• No compensation by Clearstream
• Compensated
• Partially paid
• To be reversed
• Reversed
• To be repaid
• Repaid
Cutover
From implementation date 1 December 2018, the above described changes will be applicable to both on-going and new market claims and transformations instructions.
Further information
For further information, customers may contact LuxCSD Client Services or their Relationship Officer.
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1. LuxCSD refers to LuxCSD, société anonyme registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, Luxembourg, registered with the Trade and Company Register of Luxembourg, under number B. 154 449.
2. 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.