Entitlement Compensation Rules - Ireland

10.01.2018

Bonds

Market compensation basis:Trade Date
Automatic Compensation Managed by Local CSD:No
Restriction on custody events/transaction types:No restriction
Additional information:
Compensation rule:
-Trade Date before Ex-Date and Settlement Date after Record Date or
Trade Date after Ex-Date and Settlement Date before Record Date.
Withholding tax applies to corporate bonds. No tax service is offered for market claims.
Service offered by CBL:Adjustment is performed based on information received from the depository.

Equities

Market compensation basis:Trade Date
Automatic Compensation Managed by Local CSD:Yes
Restriction on custody events/transaction types:No restriction
Additional information:
Compensation rule:
-Trade Date before Ex-Date and Settlement Date after Record Date or
Trade Date after Ex-Date and Settlement Date before Record Date.
Withholding tax applies. No tax service is offered for market claims.
Service offered by CBL:Adjustment is performed based on information received from the depository.

Types of events where automatic market claims will be generated at the CSD in the CREST system:

  • cash dividends;
  • scrip dividends;
  • enhanced scrip dividends;
  • interest payments;
  • capital repayments;
  • capitalisations;
  • open offers;
  • rights issues; and
  • selected schemes of arrangement.

There are some dividend distribution exceptions where automatic compensation will not be generated.

For example, if a corporate action event takes place at the same time as a dividend entitlement date (otherwise known as a reverse split) claims will need to be bilaterally agreed to between the parties.

Reverse market claims are automatically compensated by the CSD in the CREST system (TD= after Ex-date, settlement prior to RD)

For cash distributions

Market claims are automatically generated by CREST on RD+1 when the default currency is known.  If the default currency is not known, claims will not be generated on RD+1. 

Claims settle in CREST early in the morning of payment date, unless a previous match is deleted by both parties.

For non-cash distributions

Market claims are generated on the rights/entitlement line for the relevant issue and will settle on that line accordingly.  CREST will automatically transform any market claims or open trades that are matched, up to 10 days after the PD. 

CREST-settled claims are archived 60 business days after actual settlement date.