New guidelines on the processing of bail-in events on international debt securities held in the ICSDs
The Single Resolution Board (“SRB”) has published a document which describes elements that bank-issuers should consider for the operational aspects of the bail-in in respect of international debt securities issued by the International Central Securities Depositories (“ICSDs”).
When a bank is failing or likely to fail (“FOLTF”), resolution authorities may exercise the power to write-down and convert relevant capital instruments and eligible liabilities independently or in combination with a resolution action and apply the bail-in tool in the case of resolution.
Impact on customers
The document describes and explains the role of ICSDs in a bail-in, the stakeholders involved, processes and steps to follow, data and information requirements, communication timelines and channels to be used. It is based, to the extend possible, on existing market practices and operational rules guidelines.
The document aims to:
- provide a better understanding of the procedures the ICSDs would apply in the case of the bail-in of international debt securities for which the ICSDs act as issuer CSDs. Any actions undertaken by the ICSDs in respect of domestic securities, in their role of investor CSDs, will reflect events taking place on the local market;
- provide information to banks and resolution authorities across jurisdictions about how the bail-in of such instruments would be handled.
Further information
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.