Asset servicing - International (LuxCSD)
This section covers the following asset servicing business processes applied to the International market:
- Event announcement and Decision management;
- Payment management;
- Transaction management;
- General Meeting services;
- Tax services.
For further information about processing, reporting and connectivity for asset servicing, please refer to the LuxCSD Customer Handbook.
For specific services on the International market, please refer to the Market Profile – International (LuxCSD).
Event announcement and Decision management
Event announcements for International securities are created either based on the official terms and conditions of the issued securities (this is usually the case of interest payments, redemptions, certifications) and also based on the information received from the Common depository/Common Safekeeper Provider or from the Agent authorized to do so.
The most common Income events in the International market are Interest payments (straight or Floating), Final redemptions, Call options (Early redemptions), Partial redemptions (with or without Face value reduction), Capitalizations, Dividends, Capital gains.
Income events with options are considered by Clearstream Banking as corporate action events.
The most common Corporate action events in the International market are Conversions, Consent solicitations, Exchange offers, Exchange options, Put option, Certifications, Reverse Convertible Note (RCN) or Equity-Linked Note (ELN) maturity, Warrant expiration/exercise.
Event announcements are only generated with the Clearstream Banking corporate action reference; the Corporate Action Official Reference (COAF) is not applicable on the International market.
For further information on event announcements and entitlement forecast processing and reporting, please refer to the relevant Customer Handbook.
Predictable events
The predictable income events are usually notified to customers, at the latest, 21 days prior to payment date and under condition all key event information is available. The availability of the predictable corporate action events information depends on issuer/agents practices. Customers may instruct Clearstream Banking to carry out options foreseen in the terms and conditions of the underlying type of security. These options include, but are not limited to, put options, conversions, exercises of warrants, exchanges, detachment of warrants etc.
Unpredictable events
Events not foreseen in the security documentation (for example, terms and conditions), are announced and described in additional documents by the issuing company's management (for example, dividends, purchase offer, stock split). Unpredictable events notifications are transmitted to customers as soon as possible, generally within 24 hours after market announcement date.
Clearstream Banking collects and processes customer instructions for voluntary events, such as subscription offer, choice dividend, reinvestment option, exchange offer, purchase offer, merger with instruction etc. Sale and Purchase of Rights and Odd lots are not available.
For further information about decision management processing and reporting, please refer to the relevant Customer Handbook.
Payment management
Proceeds are calculated based on the positions recorded at the close of business on the record date and the payment is confirmed to customers via CA Confirmation upon successful receipt and reconciliation of funds.
Proceeds under the NON Available for Cash Loan (NACL) concept are paid with the value which they are received.
Proceeds under the Available for Cash Loan (ACL) concept, when applicable, are paid with good value. For further details on entries qualified as ACL, please refer to the section “5.6 Financing: availability of funds” of the Clearstream Banking Luxembourg Customer Handbook. The payment method to be applied is reported to customers via Income PAyable Report (IPAR).
For the income reversals due to external cause and where the reversed amount is greater than any repayment amount (where repayment is applicable), both reversal and repayment will be paid with a value date which is two business days after the reversal announcement by Clearstream Banking. For other reversals due to external cause, both reversal and repayment will be paid with value of additional funds received. For the reversals due to internal cause, both reversal and repayment will be paid with an original value date.
For full redemption reversals older than 30 days after the value date, if the reversed amount is greater than any repayment amount (where repayment is applicable), a consent solicitation is required.
For further information on the payment and reversal management processing and reporting, please refer to the relevant Customer Handbook.
Transaction management
Market claims and reverse market claims
For general information on the market claims processing and reporting, please refer to the relevant Customer Handbook and for the specific rules for the International market please refer to “Transaction management rules - International (LuxCSD)”.
Transformations
For general information on the transformation processing and reporting, please refer to the relevant Customer Handbook and for the specific rules in the International market, please refer to “Transaction management rules - International (LuxCSD)”.
Buyer Protection
No market practice currently defined for the International market (for example, no BP key dates available).
For further information on the processing and reporting, please refer to the relevant Customer Handbook and “Transaction management rules - International (LuxCSD)”.
General Meeting services
For international securities LuxCSD provides General Meetings services to customers (or to any third party appointed by the customer in accordance with a power of attorney) as follows:
- Basic service via LuxCSD.
Almost all meetings are EGMs, although AGMs may exceptionally occur. Each meeting event is notified via a meeting notification.
When the meeting is notified via LuxCSD, bondholders have a number of ways in which to participate in the meeting and voting.
- Bondholders may vote by proxy, in which case the votes are sent to LuxCSD , who in turn passes the information to the issuer’s agent no later than 48 hours before the meeting.
- If and when offered, bondholders may attend meetings in person in which case, to be allowed entry to the meeting, they are generally required to send to the issuer’s agent their contact details and a proof of identity, e.g. Driving License, Passport or Identity Card of each attendee.
Instructions from bondholders will result in blocking of the voted position from settlement until the results of the meeting are announced.
For details on the General Meetings service offering, please refer to the LuxCSD Customer Handbook and “General Meetings Enhanced Service - Product Description”.
Tax services
Taxability and related services are dependent on the terms and conditions of the issue.
For general information on the tax processing and reporting, please refer to the relevant Customer Handbook and for the specific rules in the International market, please refer to “Taxation - International”.