Asset servicing - Italy

23.03.2017

For the specific services on the Italian market, please refer to the Market Profile – Italy.

Please refer to the relevant CBL, CBF OneClearstream, or LuxCSD Customer Handbook for information about processing, reporting and connectivity for asset servicing.

This section covers the following business processes:

  • Event announcement and entitlement forecast;
  • Decision management;
  • Payment management;
  • Transaction management;
  • Proxy voting services.

Income and corporate actions

Event announcement and entitlement forecast

Event announcements for Monte Titoli issued securities are created based on the information received from the asset servicing provider for this market (Intesa SanPaolo, Milan).

Clearstream informs customers on an “as and if received” basis of unscheduled securities events occurring on account holdings, such as rights offers, reinvestment options, exchange offers, purchase offers, mergers etc.

The most common corporate actions in the Italian market are splits, bonus issues, capital increases/ decreases, mergers, spin-offs, exchange offers, exercises of warrants, conversions of bonds, tender offers.

Event announcements are generated with the Clearstream corporate action reference only as no Corporate Action Official Reference (COAF) is applied on the market.

For further information on event announcements and entitlement forecast processing and reporting, please refer to the relevant Customer Handbook and to Market asset servicing – Italy.

Decision management

Instructions for predictable events
Customers may instruct Clearstream to carry out options foreseen in the terms and conditions of the underlying type of security. These options include, but are not limited to, bond conversions and exercises of warrants.

Instructions for unpredictable events
Clearstream collects and processes customer instructions for voluntary events, such as subscription offer, bonus issue (both automatic and non-automatic), choice dividend, exchange offer, purchase offer, repurchase offer, de-merger with or without instructions, redemption in shares etc.

For further information about decision management processing and reporting, please refer to the relevant Customer Handbook and to Market asset servicing – Italy.

Right of Withdrawal event

Conditions of this event are mentioned in the agenda of the general meeting. If resolution to change the status of the company is voted, shareholders who have not attended the meeting or who voted against the resolution, get the right to participate to the BIDS offer (buy back from the issuer).

The “Withdrawal letter to the issuer” can be sent to Clearstream together with the MT565 instruction. The Certificate of Holding is issued by Clearstream.

Italian public offers

“Public offer” refers to a public offer to buy financial instruments from an exchange or sell financial instruments to existing shareholders.

For participation in public offers, customer instructions to Clearstream must comply with the format, modes of communication and procedures specified in the General Terms and Conditions and in the Governing Documents. Invalid or incomplete instructions will not be processed.

On request from Clearstream, customers must communicate immediately to Clearstream all information necessary for the subscription to the public offer, in compliance with applicable laws and regulations, or any information requested by Clearstream agents or by judicial, tax or regulatory authorities. Customers guarantee that such information shall be accurate, complete and up to date.

Clearstream reserves the right to withdraw its services at any time upon prior written notification to customers.

If a public offer requires the completion of an adhesion form, Clearstream will advise the customer accordingly.

In this case, customer instructions to Clearstream shall be deemed an irrevocable instruction to act as the agent of the customer and to instruct the market to do the following:

  • Fill in the relevant acceptance form to participate in a public offer; and
  • File the acceptance form with the relevant Italian authorities.

Customer requirements when the customer is the beneficial owner

The customer, upon its own responsibility to Clearstream, guarantees that, by issuing valid instructions for each public offer, it acts under its own name and for its account, as follows:

  • The customer is the beneficial owner; and
  • The customer fulfils all the conditions required in the relevant public offer; and
  • The customer will act in accordance with the terms and conditions required in the relevant public offer.

In this case and where requested by Clearstream in the corporate action notice, each customer instruction shall include the following notice:

“We confirm to you and certify under our own responsibility that as the beneficial owner we wish to adhere to the offer and that we fulfil all the conditions established in the offer. We authorise Clearstream to fill in the acceptance form of the offer, according to the above information, and sign it on our behalf.”

Customer requirements when the customer is the agent of the beneficial owner

When the customer acts as agent of the beneficial owner, the beneficial owner must ensure the following actions:

  • Each beneficial owner has validly appointed, in writing, the customer to act as its agent; and
  • With reference to each public offer, each beneficial owner wishing to participate in the relevant public offer has declared in writing to the customer that it fulfils all the conditions required in the relevant public offer; and
  • The customer, as agent of the beneficial owner and as stated in the declaration issued by each beneficial owner, will act in accordance with the terms and conditions required in the relevant public offer.

In this case, where requested by Clearstream in the corporate action notice, each customer instruction must include the following notice:

“We confirm to you and certify under our own responsibility that the beneficial owner wishes to adhere to the offer and fulfils all the conditions established in the offer. We authorise Clearstream to fill in the acceptance form of the offer, according to the above information, and sign it on our behalf as agent of the beneficial owner.”

Compliance with laws and regulations

The customer shall be liable for the validity of the participation to the public offer and compliance with any applicable legal or regulatory requirements in relation hereto.

The customer shall be fully liable towards Clearstream and must indemnify Clearstream of any damages, losses, expenses or claims of third parties arising directly or indirectly from the lack of authenticity and completeness of the information provided by customers to Clearstream, as well as for any delay of notification of the instruction or of the information to Clearstream .

The customer agrees that it shall be fully liable to Clearstream for any and all obligations created by Clearstream on their behalf pursuant to the authority or purported authority under these services.

Payment management

Coupon payment on unlisted bonds: There can be delays in processing coupon payments on unlisted bonds. Issuers of unlisted bonds are not subject to the same strict reporting rules as the issuers of listed bonds. As a consequence, Clearstream may not receive payment notifications in time for the processing of coupon payments. Clearstream will always endeavour to process such payments without any avoidable delay.

For Italian taxable securities, CBF acts as local withholding tax agent. Clearstream collects and processes all information from customers necessary to apply the adequate taxation. Cash distributions are received gross from the market and are made net of the customer's applicable withholding tax rate. 

Tax on Coupon: At the payment date, a tax is calculated on accrued interest: interest that has accumulated between the last payment date and the next payment date.

Tax on Redemption: At redemption date, a tax is calculated on accrued issuance discount: the difference between the issuing price of the bond and the redemption price upon maturity. 

For further information on the payment management processing and reporting, please refer to the relevant Customer Handbook and to Market asset servicing – Italy.

Sale and purchase of rights

Not applicable.

Transaction management

Please refer to Transaction Management in T2S.

Market claims and reverse market claims

For the Italian market rules for market claims and  reverse market claims, please refer to Transaction management rules – Italy.

Clearstream detects and process the market claims and reverse market claims on against payment and free of payment instructions of its customers as of status matched, as follows: 

Market claims and reverse market claims on CBL customer transactions

 

Internal

Bridge

Domestic

Detection

Yes

Yes

Yes

Compensation 

Yes

No

Yes

Market claims and reverse market claims on CBF OneClearstream customer transactions

 

Intra-CSDa

(CBF-CBF, CBF-CBL) 

Cross-CSD

(CBF – LuxCSD)

Cross-CSD

(CBF – T2S counterparty)

Detection

Yes

Yes

Yes

Compensation

Yesb

Yesb

Yesc

a. Including Eurex Clearing and LION related trades (subject to specific rules).

b. Market claims and reverse market claims in non-T2S eligible currencies and securities are processed on the corresponding CBF-i or CBL account of the CBF customers.      

c. Excluding non-T2S eligible currencies and securities.

Market claims and reverse market claims on LuxCSD customer transactions

 

Intra-CSD

(LuxCSD - LuxCSD, LuxCSD - CBL) 

Cross-CSD

(LuxCSD – CBF)

Cross-CSD

(LuxCSD – T2S counterparty)

Detection

Yes

Yes

Yes

Compensation

Yesa

Yesa

Yesb

a. Market claims and reverse market claims in non-T2S eligible currency/securities are processed on the corresponding CBL accounts of the LuxCSD customers.

b. Excluding non-T2S eligible currencies and securities.

Both market claims instructions, in cash and in securities, are processed via matching settlement instructions generated on behalf of customer accounts, flagged as follows:

 

ICP customers

MT54x

DCP customers 

sese.023/sese.025

Market claim and reverse market claim instruction

22F::SETR//CLAI

Transaction code: CLAI

Detected market claims are reported to customers in  the Custody Market Claims report and via MT564 Claim and Reversal Advice. 

Debits/credits resulting from market claims and reverse market claims compensations are reported in the Custody Market Claims report and via MT564 Claim and Reversal Advice. 

The market claims and reverse market claims are visible in CreationOnline (CBL customers only) and in Xact Web Portal.

For further information on the processing and reporting, please refer to the relevant Customer Handbook.

Transformations

For the Italian market rules for transformations, please refer to Transaction management rules – Italy.

Clearstream detects and process the transformations on pending matched against payment and free of payment instructions of its customers, as follows: 

Transformations on CBL customer transactions

 

Internal

Bridge

Domestic

Detection

Yes

Yes

Yes

Cancellation  

Yes

Yes

Yes

Re-instruction

Yes

No

Yes

Transformations on CBF OneClearstream customer transactions

 

Intra-CSDa

(CBF-CBF, CBF-CBL) 

Cross-CSD

(CBF – LuxCSD)

Cross-CSD

(CBF – T2S counterparty)

Detection

Yes

Yes

Yes

Cancellation  

Yes

Yes

Yes

Re-instruction

Yesb

Yesb

Yesc

a. Including LION related trades (subject to specific rules).

b. Re-instructions in non-T2S eligible currency/securities are processed on the corresponding CBFi/CBL accounts of the CBF customers.   

c. Re-instructions in non-T2S eligible currency/securities.

Transformations on LuxCSD customer transactions

 

Intra-CSD

(LuxCSD - LuxCSD, LuxCSD - CBL) 

Cross-CSD

(LuxCSD – CBF)

Cross-CSD

(LuxCSD – T2S counterparty)

Detection

Yes

Yes

Yes

Cancellation  

Yes

Yes

Yes

Re-instruction

Yesa

Yesa

Yesb

a. Re-instructions in non-T2S eligible currency/securities are processed on the corresponding CBL accounts of the LuxCSD customers.

b. Re-instructions in non-T2S eligible currency/securities.

Both re-instructions, in cash and in securities, are processed via matching settlement instructions generated on behalf of customer accounts, flagged as follows.

 

ICP customers

MT54x

DCP customers 

sese.023/sese.025

Re-instructions in securities

 

22F::SETR//as in the underlying instruction
22F:TTCO//TRAN

 

 

Transaction code: as in the underlying instruction

Transaction condition: TRAN              

Re-instructions in cash

 

22F::SETR//CORP
22F:TTCO//TRAN

                                  

Transaction code: CORP

Transaction condition: TRAN

Transformations are subject to settlement reporting.  

For further information on the processing and reporting, please refer to the relevant Customer Handbook. 

Buyer protection 

For the Italian market rules for buyer protection, please refer to Transaction management rules – Italy.

Clearstream does not introduce an automated buyer protection infrastructure. Instead buyer protection will be handled bilaterally between the counterparties, that is, outside the CSD environment.

In order to comply with the Corporate Actions standards on manual buyer protection, customers must use the Corporate Actions Joint Working Group (CAJWG) Buyer protection invocation template for corporate actions if the requested option is not the default option, referencing the corporate action, the chosen option(s), the quantity of securities and the underlying transaction in the template. The template must be sent electronically (via fax or email) to the seller.

When provided on the market, the below key buyer protection dates will be included in Clearstream MT564 Corporate Action Notifications:

  • Election to counterparty deadline in :98a::ECPD and
  • Guaranteed participation date in :98a::GUPA.

For further information on the processing and reporting, please refer to the relevant Customer Handbook. 

Proxy voting services

Proxy voting services are available in Clearstream for this market. For details about the proxy voting services offered by Clearstream, please refer to the relevant Customer Handbook and Income, Corporate Actions, Proxy voting - Italy.