Portugal: Activation for Interbolsa issued securities - Asset services market specifics
LuxCSD1 would like to inform customers that effective
14 December 2020
the activation of LuxCSD services for instruments issued by Interbolsa 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).
Please note that for deposit purposes, the FIA (Fund Issuance Account) code must be populated under the BENODET field whenever instructions are sent for a centralised EXRI or any other event on which this requirement is necessary.
Proxy Voting
Customers that want to vote at general meetings (physically or by proxy) must instruct to register holdings in the name of the shareholder before the record date of the general meeting as defined by the respective company.
The minimum requirement for participation and exercising of voting rights at a general meeting is for the shareholder to have at least one share registered in their name at 00:00 (GMT) on RD (MD - five business days).
Split and partial voting is not allowed on the Portuguese market.
Please refer to OneClearstream Functional Specifications 4.7 for further details.
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.
- No market claims will be generated for non-T2S eligible proceeds (for example, cash distributions in another currency than EUR) for cross-border trades when the counterparty is outside of LuxCSD. All other trades will be subject to market claims as per standard LuxCSD service description using the corresponding LuxCSD accounts of LuxCSD customers.
Please refer to Market Link Guide - Portugal 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:
- Interbolsa processes transformations at the end of record date. For unmatched instructions, this means cancellation only. LuxCSD will not cancel any pending unmatched instruction but waits 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.
- Re-instructions in non-T2S eligible proceeds (for example non-EUR) will not be generated for cross-border trades when the counterparty is outside of LuxCSD. All other trades will be subject to transformations as per the standard LuxCSD service description using the corresponding LuxCSD accounts of LuxCSD customers.
Please refer to Market Link Guide - Portugal for further information.
Buyer protection
The manual buyer protection mechanism applies.
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 Market Link Guide - Portugal 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.