France: Procedure for dividend short entitlement positions on the CASCADE platform

25.05.2016

This Announcement supersedes Announcement D12043, dated 9 August 2012, to reflect the updated procedure.

Effective

immediately

and following our Announcements D11010, dated 9 February 2011, and D11014, dated 24 February 2011, Clearstream Banking Frankfurt1, acting in its role as French fiscal agent, provides you below with the procedure and impacts in cases of dividend short entitlement positions identified on the CASCADE platform.

  • CBF will inform the respective customer via SWIFT message MT568 as soon as a dividend short entitlement position occurs on its account, providing all relevant details such as quantity, ISIN code and dividend payment date. This may result from you settling a short sale "cum dividend" with an "ex dividend" stock. As a consequence, the compensation payment, which was debited from your account and passed on to your counterparty, did not match with the real dividend payment, which had been distributed to the shareholders and for which tax had been withheld.
  • Moreover, CBF will inform the respective customer in the above-mentioned SWIFT message about the possibility to fully cover this dividend short entitlement position by transferring a long position via an appropriate receipt transaction cum dividend eligible for a market claim, assuming that it may be in the respective customer‘s own interest to correct such a situation in order to avoid any subsequent debit by CBF on a remaining dividend short entitlement position.

To sum up, CBF will systematically debit you with the 100% gross dividend amount based on every French dividend short entitlement position on the CASCADE platform unless the shortage will be fully covered by a receipt cum transaction on the CASCADE platform or on the ESES market platform by a cross-border receipt transaction cum dividend.

Market claim periods

Please find below, as additional information with regard to the above-mentioned coverage possibility, a summary concerning the respective market claim periods on CASCADE as well as on the ESES market platform.

CBF market claim period

The CBF market claim processing period for automatic compensations on settled OTC transactions as well as on stock exchange LION trades applies for 20 consecutive business days starting from record date +1. Please also refer to Compensation Handbook: Corporate Action Transaction Management.

ESES market claim period on cross-border transactions

Euroclear France automatically transfers the proceeds of the mandatory distribution from the seller to the buyer via market claims during 45 business days as from ex date.

CBF does not accept any responsibility for any market claim on cross-border transactions. Any market claim period specifications contained in this document are correct at the time of its publication, but may be subject to later changes without notice.

In relation to the coverage possibility of a potential dividend short entitlement position, please note that CBF will not guarantee any market claim on late transactions cum dividend, if:

  • The relevant pre-requisite for a CBF or an ESES market claim is not achieved for whatever reason and/or;
  • The necessary instruction and settlement criteria on the relevant market and platform have not been met for whatever reason.

Further information

For further information, customers may contact their Clearstream Banking1 Client Services or Relationship Officer.

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1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.