Asset servicing registered securities - France
Whenever French securities are held in registered form and subject to a voluntary corporate action (VOLU), or mandatory with choice (MAND CHOS), with a debit or a credit of securities in registered form, customers are requested to instruct Clearstream Banking using one MT565 for each BO wanting to participate to the corporate action event, mentioning the BO details in the field :70E::REGI. If customers use qualifier :70E::INST in their MT565 instead of REGI to mention the BO details, straight through processing will not be possible and Clearstream will have to repair the instruction manually, incurring repair fees.
Corporate actions instructions sent without beneficial owner details for securities held on a registered account will be rejected.
For mandatory corporate actions (for example, redemption, stock split or assimilation) registration will be fully handled by Clearstream Banking.
AS registered securities held on registered account | ||
VON in registered form, temporary LBS and final LBS | For CBF customers | For mandatory corporate actions (for example, redemption, stock split or assimilation) registration will be fully handled by Clearstream. For voluntary events, instructions sent without beneficial owner details for securities registered in BO name will be rejected Security proceeds will be paid to the sub account XXXX-203. If the proceed is in bearer form, then it will be credited to the main account “xxxx000” linked to the sub-account XXX-203 |
For CBL customers | Instructions sent without beneficial owner details for securities registered in BO name will be rejected. For mandatory corporate actions (for example, redemption, stock split or assimilation) registration will be fully handled by CBL Security proceeds will be paid to the ‘’registered’’ account , unless the proceed is in bearer form, then it will be credited to the ‘’over linked account ‘’ linked to the ‘’registered’’account. | |
For LuxCSD customers | Service not available | |
AS registered securities held on standard/ main account | ||
VEN positions registered in final BO name | For CBF customers | For mandatory corporate actions (for example, redemption, stock split or assimilation) registration will be fully handled by Clearstream. For voluntary events, customers are required to request the unblocking of their positions from the account XXXX- 851. Instructions are expected to be received with beneficial owner details otherwise Clearstream will consider that the instructed position is the one registered in the name of Clearstream Banking Frankfurt and process the registration based on this. Security and cash proceeds will be paid on the main account XXXX-000 |
For CBL customers | For mandatory corporate actions (for example, redemption, stock split or assimilation) registration will be fully handled by Clearstream. For voluntary events, customers are required to request the unblocking of their positions from the account where position is held Instructions are expected to be received with beneficial owner details otherwise Clearstream will consider that the instructed position is the one registered in the name of Clearstream Banking Frankfurt and process the registration based on this. Security and cash proceeds will be paid on the account where position is held | |
For LuxCSD customers | Service not available | |
Loyalty Bonus shares (CBF and CBL only)
Under French law, companies may distribute bonus dividends to shareholders that have been holding their shares in registered form for a minimum period of two calendar years. The securities must be registered in the name of the final beneficiary.
Only shareholders that have been holding their loyalty bonus shares in registered form (under the name of the final beneficiary) for a minimum of two calendar years are entitled to the bonus dividend. Registration must be completed before the end of fiscal year to secure eligibility for any bonus dividend for the same year.
The holding of each shareholder entitled to the bonus dividends is limited to 0.5% of the company’s capital as listed on the Premier Marché and on the Second Marché.
The net bonus dividend due to shareholders of loyalty bonus shares may increase the net ordinary dividend by a maximum of 10%.
Loyalty bonus shares are accounted for under a different ISIN from the ordinary shares and are not tradable. The following restrictions also apply in CBL:
- Internal transactions between CBL participants are not allowed.
- Bridge transactions with Euroclear Bank participants are not allowed.
- External transactions are allowed as shown in the following sections.
Asset servicing for securities subject to a LBS programme
LBS processing takes place in three distinct corporate action events, EXOF VOLU, CHAN MAND and PARI MAND.
- Customers will be notified via MT564 EXOF VOLU with option SECU. The MT564 notifications will always be sent to the customer account holding the bearer position;
- One MT565 per BO will be requested which will contain the registration details in field :70E::REGI (:70E::INST may be accepted as well but only manual processing will be possible, as consequence the instruction will be subject to repair fees);
- A delivery free of payment instruction without matching with field :70D::REGI will be generated by Clearstream based on MT565 for each underlying BO. Upon successful settlement of instructions, Clearstream Banking will register the securities with Euroclear France. If rejected by the market, Clearstream Banking will advise customers accordingly if additional action is required from customer;
- At the end of the current fiscal year, customers participating in the LBS program will be notified via MT564 CHAN MAND (with qualifier CHAN :22F::CHAN/BERE). The new CHAN MAND event will contain a SECMOVE block to notify the distribution of the temporary LBS. The security proceeds will be credited to the customer registered account at beginning of the next fiscal year. The MT564 notifications will always be sent to the customer account holding the registered position;
- After the pre-defined period of retention (usually two or four years), entitled customers will be notified via MT564 PARI MAND that the temporary LBS will be assimilated into a new LBS ISIN. The MT564 notifications will always be sent to the customer account holding the registered position.
SWIFT messages to be used for the processing of the LBS program
Security | Event type | Notification | Instruction | BO details | Result |
ISIN A VON bearer | EXOF VOLU | MT564 YIR | MT565 | Yes, via :70E::REGI | ISIN A VON Registered |
ISIN A VON registered | CHAN MAND | SECMOVE block and MT566 confirmation when executed | n/a | n/a | ISIN B temporary LBS registered |
ISIN B temporary LBS registered | PARI MAND | MT564 and MT566 confirmation when executed | n/a | n/a | ISIN C LBS registered |
Procedure to leave the LBS program
Customers can leave the Loyalty Bonus Shares program at any time during the year. This service supports the removal of temporary or final LBS ISIN and be credited of VON ''mother code'' in bearer form (''step out service”).
Customers can continue to instruct via asset servicing messages and enforce market practices by validating the compliance to the LIFO (Last In First Out) method.
This method is used by the issuers and registrars to ensure that the beneficial owner can get the benefit of any vested right on positions held for a period very close to the end of the lock up period.
Customers are required to instruct as follows:
- at Beneficial Owner level;
- using the latest ISIN entered in the program first;
- split the instruction if the overall position to step out exceeds the position held on the latest ISIN entered in the program.
For example, a customer holding a total position of 1200 shares in registered form for a given BO and the holding is split as described below.
ISIN type | Holding | Application of LIFO | Instruction expected |
Loyalty Bonus 2021 (i.e. will become definitive loyalty bonus in 2021) | 200 | 200 | 200 (first MT565) |
Loyalty Bonus 2020 (i.e. will become definitive loyalty bonus in 2020) | 300 | 300 | 300 (second MT565) |
Definitive Loyalty Bonus Code | 700 | 100 | 100 (third MT565) |
Clearstream will reject the instruction if the above method is not respected.
Procedure regarding companies involved in insolvency proceedings issued by the Comité Français d’Organisation et de Normalisation Bancaire – (CFON)
This procedure concerns all types of companies: French, foreign listed or unlisted.
According to this procedure, the issuer agent will be able to request to close the security without waiting for the liquidation decision and the distribution of a potential “boni de liquidation”.
For French companies issuing securities that are involved in insolvency proceedings
The issuer agent requests Euroclear France to open a period of 30 business days to allow account holders to carry out conversions of their holdings in registered form.
At the end of the 30 business day period, and upon confirmation by the issuer agent, Euroclear France closes the security and issues balance certificates to the account holders.
For foreign companies issuing securities that are involved in insolvency proceedings
The issuer agent requests Euroclear France to open a period of 60 business days to allow account holders to transfer their assets to a correspondent linked to the issuer CSD of the security in order to preserve the potential rights of the investors.
At the end of the 60 business day period, if there are no securities balances in Euroclear France, the security will be closed.
Note: For foreign securities for which Euroclear France is the issuer CSD, the period will be 30 business days. At the end of this period, Euroclear France closes the security by issuing balance certificates to the account holders.
It will be mandatory for securities to be registered directly under the BO name. If registration is not completed before the Clearstream deadline, the securities will be registered under the name of the Clearstream customer holding the securities at the time of the event.
Processing flow:
