Spain: Activation for Iberclear issued securities - Asset services market specifics
LuxCSD1 would like to inform customers that effective
30 November 2020
the activation of LuxCSD services for instruments issued by Iberclear Asset Servicing will be subject to the following market specific changes.
Corporate actions on stock (based on settled positions)
For LuxCSD customers, corporate actions on stock will be subject to the service level as described in the OneClearstream Functional Specifications (for example, payment of all corporate action proceeds in T2S, asset servicing instructions and reporting in LuxCSD standards.
There is no change of service level for LuxCSD customers.
Corporate actions on flow (market claims, transformations and buyer protection)
For LuxCSD customers, corporate actions on flow will be subject to the service level as described in the OneClearstream Functional Specifications (for example, payment of market claim proceeds in T2S and asset servicing reporting in LuxCSD standards).
There is no change of service level for LuxCSD customers, except for the below.
Market Claims
Market claims applied to domestic trades with LuxCSD market counterparties will be generated as matching settlement instructions.
The detection and compensation rules for market claims on domestic trades will be further aligned with the issuer CSD rules:
- Market claims will be processed on gross basis.
- Market claim instructions will be generated on pending trades as of status matched and regardless of the payment status of the underlying corporate action event.
- For CHOS events neither market claims nor transformations will be generated. For other events, the standard LuxCSD rules apply as described in the LuxCSD Customer Handbook.
Please refer to the Market Link Guide - Spain for further information.
Transformations
Re-instructions due to transformation applied to domestic trades with LuxCSD market counterparties will be generated as matching settlement instructions.
Detection, cancellation and re-instruction rules for transformations on domestic trades will be further aligned with issuer CSD rules:
- Iberclear processes transformations at the end of the record date over the total of positions, including matched and unmatched instructions. For unmatched instructions, this means cancellation only. LuxCSD will not cancel any pending unmatched instruction but will wait for T2S to cancel the trade when the securities are redeemed.
- For CHOS events, neither market claims nor transformations will be generated. For other events, the standard LuxCSD rules apply as described in the LuxCSD Customer Handbook.
Please refer to the Market Link Guide - Spain for further information.
Buyer protection
The manual buyer protection mechanism will apply.
The manual buyer protection mechanism is a bilateral agreement between the trading parties by means of a manual process (no intervention from the market infrastructure regarding the exchange of buyer protection instructions).
Customers must use the CAJWG compliant template, attached below, for buyer protection invocation (BPI) if the requested corporate action option is not the default option. The template must be completed by the buyer with the relevant information (for example, corporate reference, options, the quantity of securities and the underlying transaction) and communicated directly to the seller.
In line with the CAJWG Market standards for Corporate actions processing, the MT564/568 Corporate Action Notification messages will include the following Buyer Protection (BP) key dates:
- Election to counterparty deadline in :98a::ECPD;
- Guaranteed participation date in :98a::GUPA.
Further information
Please refer to the Market Link Guide - Spain for further information.
For further information, customers may contact LuxCSD Client Services or their Relationship Officer.
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1. LuxCSD refers to LuxCSD S.A., registered office at 42, Avenue J.F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B-154.449.