FAQs - Corporate Actions
How does Clearstream advise a customer of a Corporate Action event?
Notifications are released by Clearstream on a continuous basis during the day. Clearstream releases notifications when confirmed information is available.
Clearstream will, at its own discretion, decide whether and when unconfirmed information is to be forwarded to customers and will flag such information as ‘unconfirmed’, if provided.
Clearstream will send a Corporate Action notification for all events affecting positions held on a customer’s account. These notifications are issued via SWIFT and CreationConnect as MT564s and MT568s and are also available via CreationOnline in the Custody module. For certifications under the U.S. Tax Equity and Fiscal Responsibility Act (TEFRA D), Clearstream will additionally send notifications on pending receipt instructions.
How can I identify the type of event/notification?
Clearstream will differentiate between voluntary and mandatory events as well as mandatory events with choices.
A ‘For Your Information’ (FYI) notification will be sent for the mandatory events (in SWIFT, this will be expressed with the qualifier MAND). This will be used for events where no action from the customer is necessary i.e. split, mergers, etc.
Voluntary events and mandatory events with choices will be created as ‘Your Instruction Requested’ (in SWIFT, the qualifier VOLU for voluntary events and CHOS for mandatory events with choices will then be used). The events concerned are those requiring a decision or action from the holder of the securities, for example exercise of rights, purchase offer, merger with choices etc.
Do I need to instruct for all Corporate Action events?
An instruction is needed for the ‘Your Instruction Requested’ notifications as well as some Certification Requests.
An instruction is required if the security holder does not want the Default Option to be applied.
What instruction type should I use for Corporate Action events?
To ensure fast processing and to benefit from the full life-cycle of information, customers should send corporate action instructions using Creation via SWIFT and CreationDirect MT565 messages or CreationOnline.
CreationOnline users can easily instruct by opening the original notification message under Custody and clicking on the respond button.
MT599 are only allowed in exceptional cases and Client Services should be contacted beforehand for consultation.
What will Clearstream do when it receives a Corporate Action instruction?
Solicited events fall under a predefined exercise period punctuated by a deadline, as reported on the corporate action notification. Customers should always send instructions before the Clearstream deadline. Instructions are processed according to deadline priorities.
The instruction will be validated, authorised for straight-through processing where possible, sent to the depository and the instructed position will be blocked on the customer’s account. For record date based events, usually the instructed position will not be blocked on the customer’s account.
What happens if I instruct late or forget to send my instruction?
If you forget to send your instruction, Clearstream will apply the default action stated in the notification (default indicator).
If you instruct late (after the Clearstream deadline), Clearstream will handle your instruction on a best effort basis and transmit it to the depositories/agents; however, execution cannot be guaranteed.
If it is not anymore possible for Clearstream to process your instruction, Clearstream will apply the default action stated in the notification (default indicator). In any case, customer should contact Client Services for further clarification.
How can I cancel a Corporate Action instruction?
If instructions have already been processed and forwarded to the local market, the agent or the depository, Clearstream will forward the cancellation request accordingly, but cannot guarantee execution of the cancellation request.
Corporate Action instructions can be cancelled by sending a formatted MT565 Cancellation message and linking the cancellation to the previous instruction.
In CreationOnline a customer can directly click on ‘Request Cancellation’ in the Custody Post-Release module.
To replace an instruction that has already been sent, customers must send a cancellation message before re-instructing.
Please note that all cancellation requests will be handled on case by case basis, given that the instructions may or may not be revocable or are irrevocable as per event conditions, and cancellation confirmation has been received by the depository.
Can I send an instruction when I have not yet received a notification?
An MT565 instruction can be sent to Clearstream regardless of whether or not a Corporate Action Notification has been previously sent. It is recommended that the exact event type be used.
In CreationOnline, unsolicited instructions can be generated within the Custody Pre-Release module.
How can I be sure that Clearstream has received my instruction?
Customers instructing MT565s via SWIFT, CreationDirect or CreationOnline will receive a status and processing advice message for each corporate action instruction sent to Clearstream, if subscribed for.
If you have subscribed for the receipt of SWIFT MT567 Acknowledgement messages, Clearstream will send confirmation via this message type. If you have not subscribed for these messages and would like to do so, please contact Clearstream’s Connectivity Helpdesk.
In CreationOnline, the status of the instruction (received/recorded etc.) is automatically available by querying in the CreationOnline Custody Post-Release module.
If the corporate action instruction was sent using a free-format message, customers will not receive a status and processing advice.
How can I identify any uninstructed events?
In the MT564 SWIFT Corporate Action Notification issued for an event, Clearstream informs customers on the details of the position.
:93B::ELIG// eligible balance
:93B::INBA// instructed balance
:93B::UNBA// uninstructed balance
This information is also available within CreationOnline in the Custody Module.
Customers can also view at a glance the Custody Dashboard in CreationOnline that provides an overview of the number of uninstructed events.
The Urgent Uninstructed Balances report, available through CreationDirect, gives an overview of uninstructed balances for Corporate Actions and assists customers in monitoring voluntary events.
What should I do if my instruction has been rejected?
Instructions that cannot be processed due to insufficient holdings will not be executed, but held in suspense either for a period of five consecutive business days starting on the date of receipt of the instruction or until the relevant Clearstream deadline, whichever occurs first.
Clearstream will inform the customer if an instruction is incomplete, if cash provision is insufficient for the execution of the instruction, if required documentation or certification are missing or if other requirements are not satisfied (e.g. customer does not provide details for delivery outside of Clearstream in case security proceeds are not Clearstream eligible).
Clearstream cannot be held responsible for any loss or damage caused by a delay in the execution of an instruction or cancellation of an instruction that did not fulfil one or more of the above conditions.
How can I see if an asset is blocked due to a Corporate Action?
The blocked asset will be detailed in the security balance.
The Security Balance is available in CreationOnline as a query called ‘Securities Balances’.
It is also provided in the MT535 Statement of Holdings report:
:93B::BLOK// blocked balance (used for particular custody events such as meeting, consent)
:93B::BLCA// blocked pending corporate actions
How can I verify whether the Corporate Action proceeds have been applied?
Clearstream generates MT566 Corporate Action Confirmations as soon as cash and/or securities have been credited/debited.
A CreationOnline query is available in the Custody Module allowing users to search for confirmations.
Furthermore, CreationOnline provides a link for cash and securities proceeds in the Corporate Action Notification.
Can I buy or sell rights through Clearstream? If so, how?
Clearstream offers a trading service for subscription rights.
The service for the sale and purchase of rights enables customers to trade rights according to the market rules, the respective trading period and the specifications in the event option details.
Customers may send multiple trade instructions within the trading period of the related corporate action, subject to the available rights held prior to the trading deadline.
Given the continuing development of markets and deadlines, the full details of this service are described in the document Sale and Purchase of Rights.
Where can I find information regarding compensation processes for Corporate Action events?
Rules regarding compensation of internal settlement instructions can be found in the Custody section of the Customer Handbook.
Bridge instructions are not subject to the automatic compensation process offered by Clearstream.
Domestic instructions are subject to entitlement compensation based on local market rules. Entitlement adjustments are performed by Clearstream based on information received from the Depository.
For more information about local market rules, please refer to the Entitlement Compensation Rules Guide at www.clearstream.com.
Who should I contact if I have any questions relating to a notification?
If you have any further questions, please call your Client Services Officer or the contact person stated in the notification.
If you are unsure who your Client Services Officer is, please consult the Client Support area of this website where you will find the contact details for our Client Services departments worldwide.
Why does Clearstream send Certification of Beneficial Ownership (U.S.A.)?
Securities under TEFRA D regulations are subject to investment restrictions and cannot be held on behalf of a U.S. resident (as a final beneficiary) for a period of time (usually for 40 days after issue date).
For these securities Clearstream must obtain a certification for any position held on behalf of non-U.S. resident or qualified investor. Failure to receive the requested certification before the deadline will imply the blocking of the uninstructed position.
Clearstream will send an MT564 Corporate Action Notification with an event type Certification Request (SWIFT qualifier will be SMPG/CERT), requesting that the customer should inform Clearstream if there are any unqualified beneficial owners.
Customers should respond to this request by sending an MT565 custody instruction or respond via CreationOnline.
How can I see the details of a Corporate Action event if I do not have a holding?
CreationOnline enables a user to view detailed information about Corporate Actions for any security eligible in Clearstream, even if the customer does not hold the underlying security.
This query is available under Reference Data / Corporate Actions.
How can I obtain a copy of the prospectus or Terms and Conditions?
From CreationOnline Reference Data, customers will be able to download the terms and conditions and prospectuses directly via CreationOnline.
The user will be able to query Financial Instruments to obtain Terms and Conditions by two routes:
- As currently, request Terms and Conditions for delivery to CreationDirect file store; or
- download Terms and Conditions from CreationOnline to the user’s computer.
In case a customer does not have access to CreationOnline, they may request special assistance from Client Services to obtain the documents.
The download of the prospectus is subject to fees as stipulated in the fee schedule.