Creation Link Guide - New Zealand

16.05.2018

Key features

CSD link as defined under CSDRa

Yes

Type of link

Indirect

a. CSD Regulation (EU) No 909/2014 art. 2 (29)

 

CSD

Custodian

Name

NZCSD

JPMorgan Chase Bank, N.A., Sydney Branch

FATCA GIIN

Not applicable

E86.00464.ME.554

LEI

54930066LV3G32L0HB48

7H6GLXDRUGQFU57RNE97

Country of incorporation

New Zealand

USA

Account type

Omnibus account

Omnibus account

Account name

All NZCSD eligible securities are registered in the name of  J.P. Morgan Chase Bank N.A. New Zealand Branch – Segregated Client Account.

JPMorgan Chase Bank N.A. (New Zealand branch) as the participant in NZCSD does not hold an individually segregated account for CBL at NCSD.

Clearstream Banking SA 

Operational arrangements

Yes/NoRemarks
Settlement free of paymentYes  
Settlement against paymentYes Eligible settlement currency: New Zealand Dollar (NZD).
Settlement against payment in central bank money account of CBL/CBL customerNoAgainst payment settlement takes place on the cash account of JPMorgan Chase Bank, N.A., New Zealand Branch. Only CSD-member banks can have an account at the local central bank.
Bridge settlementYesFor debt securities only.
Shaping facilityNo 
Partial settlementNoExcept when the local CSD imposes the partial delivery of securities.
Settlement penalty feesNo 
Pre-matchingYes Subject to counterparty availability.
Back-to-back processingYes  
AllegementsNo 
Automatic compensationNo 
Registered securitiesYes 
  • For dematerialised securities, registration takes place automatically upon settlement.
  • For physical securities, manual intervention will be required and not automatically.
Multi Market SecuritiesYes Refer to the Multi-securities Guide.
Lending and borrowingYes Debt Securities.
Proxy votingYes  
Investment FundsYes ETF only.
Liquidity Hub ConnectNo 
Sale and purchase of rightsYes  
Repo servicesYes Internal Repo service for Bonds and Equities (refer to Cmax Product Guide)
Market restrictionsYes CBL's Holding restrictions beneficial owners who are New Zealand residents for tax purposes.
FTTNo 
Daily reconciliationYes
Link eligible for use in Eurosystem credit operationsNo
Bilateral cancellationNo

Settlement finality

Settlement is considered final once cash and securities are exchanged and a confirmation is received from the CSD. It is not possible to unwind completed settlement.

Legal arrangements

The below section is based on the legal opinion obtained by CBL that was issued on 21 October 2016. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.

No insolvency proceedings against the custodian

Confirmed

Liability for negligence

Confirmed

Book-entry regime with in rem rights

Local laws do not explicitly provide for in rem rights. Despite the lack of a local court decision, based on common law principles, CBL should have in rem rights to the securities deposited with the custodian.

Recognition of nominee concept

Confirmed

No right of retention to the custodian

Confirmed

Segregation of assets at the CSD

No statutory requirement for the custodian to segregate its own assets from the assets held for its account holders.

No right of use

Confirmed

No upper-tier attachments

Confirmed

Insolvency of custodian with no impact on CBL's rights 

In the case of liquidation, statutory management or voluntary administration being intitiated or filed against the custodian, such procedure may, depending on the factual circumstances, impact on CBL's rights on the assets.

Shortfall pro-rated among holders

Share of shortfall on a pro rata basis is the most likely outcome.

Settlement finality in case of insolvency

Local laws do not provide for the irrevocability and unconditionality  of non-provisional transfers of securities.