France: Changes to processing of Dividend Option events (DVOP)
LuxCSD1 informs clients that the processing of French dividend option events will be adapted and aligned to follow the change of the French market practice, effective
18 November 2024
Background
Currently, the corporate action notification for the French DVOP event announces cash and securities options. Security option is set for each tax rate available on the market (gross and net of the default and other applicable tax rates).
Payments are pre-advised to clients via MT564 IPAR and Xact Web Portal IPAR.
New processing
The corporate action notification for the French DVOP event will include two new indicators under the qualifier 22F:OPTF for the security options:
- RGRS: Gross (roundup/round down).
In the corporate action instruction, no tax rate should be provided by the client in the field :92A::TAXB//, as by default the reinvestment will be done gross. - RNET: Net reinvestment.
In the corporate action instruction, clients will be required to specify the applicable tax rate they would like to benefit from using 92A::TAXB//xxxxx, in accordance with their tax profile.
Note: If the default tax rate is chosen, clients can either specify the rate in the field :92A::TAXB//25 or leave it blank.
Other tax rates accepted are 15, 12.8 and 10 or other specific DTT rates.
The entitlement will be calculated on a gross or net basis, depending on the instruction received from the client.
The Xact via Swift User Guide will be updated accordingly.
Further information
For further information, clients 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.