Asset servicing - UK equities, corporate bonds and investment trusts

17.01.2020

Income collection

Debt securities

For both debt securities and equities, Clearstream Banking record date is payment date -1 business day and ex-date equals payment date.

Service offeredRemarks
Notification to customers

Standard Asset Servicing reporting via SWIFT MT56x, Xact Web Portal, CreationOnline and Xact File Transfer.

See Section 8 “Asset servicing” of the Customer Handbook.

See Connectivity manuals on the Clearstream website.

Payment of proceeds

Proceeds are calculated based on the positions recorded at the close of business on the record date and paid to the customer's account upon successful receipt and reconciliation of funds. Proceeds will be paid with the value with which they are received. 

Funds under the Available for Cash Loan (ACL) concept, when applicable, are paid with good value.  

The payment method to be applied is reported via MT564 IPAR and Xact Web Portal IPAR.

For further details on entries qualified as ACL, please refer to the section “5.6 Financing: availability of funds” of the Customer Handbook.

Equities

Record dates for equities are determined by the relevant companies according to domestic market practice and are updated by CBL in accordance with information received from depositories, newspapers, companies and information suppliers.

Service offeredRemarks
Notification to customers

Standard Asset Servicing reporting via SWIFT MT56x, Xact Web Portal, CreationOnline and Xact File Transfer.

See Section 8 “Asset servicing” of the Customer Handbook.

See Connectivity manuals on the Clearstream website.

Payment of proceeds

Dividend payments - usually paid four or six weeks after Ex-date Proceeds are calculated based on the positions recorded at the close of business on the record date and paid to the customer's account upon successful receipt and reconciliation of funds. Proceeds will be paid with the value with which they are received. 

Income payments following elections in an Optional Dividend (DVOP) or Dividend Reinvestment Plan (DRIP) will be paid to customers only upon receipt of funds.

For processing dividends with options, issuers and registrars may decide to distribute non-tradable rights. Where rights are distributed, customers who wish to elect for the optional dividend must to do so by using the ISIN code of the right being distributed.

Funds under the Available for Cash Loan (ACL) concept, when applicable, are paid with good value.  

The payment method to be applied is reported via MT564 IPAR and Xact Web Portal IPAR.

For further details on entries qualified as ACL, please refer to the section “5.6 Financing: availability of funds” of the Customer Handbook.

a. Ex-date generally falls on a Thursday with the Record date on the following Friday.

Corporate actions

Service offeredRemarks
Notification to customers
Clearstream Banking advises customers of their entitlement to participate in UK corporate actions (including, but not limited to, stock dividends, rights issues, bonuses and takeovers/mergers.

In addition, CBL informs customers, on an “as and if received” basis, of unscheduled securities events occurring on account holdings, such as rights offers, reinvestment options, exchange offers, purchase offers, mergers etc.
No specific deviations from standard reporting provided by CBL apply to the UK market.
Instruction to CBL
Customers may instruct CBL to carry out options foreseen in the terms and conditions of the underlying type of security. These options include, but are not limited to, put options, conversions, exercises of warrants, exchanges, detachment of warrants etc.

The issuance of new securities as a result of a corporate event does not generally give rise to SDRT under the 0.5% SDRT regime or under the 1.5% SDRT regime. Further information on the charge to SDRT in relation to corporate actions is available in the respective corporate action notification.

Mandatory Rights Distribution: For mandatory with choice or voluntary call or exercise on nil paid securities or intermediate securities resulting from an intermediate securities distribution, the default action on pending trades is to be to carried out according to the LSE rules. The current applicable rulesa dictate the following:

Rule 5430: A seller to whom a rights claim is issued shall deliver the rights at or before the latest time for delivery and a buyer is not obliged to accept delivery of rights after that time.
Guidance to Rule: Where either the seller fails to deliver, or the buyer does not accept delivery, settlement of the rights shall take place in accordance with rule 5440.

Rule 5440: Where nil paid or partly paid rights are not delivered by the latest time for delivery, the seller shall, unless a lapsing instruction has been given, make any payment due on the call payment day on behalf of the buyer. The buyer shall then refund to the seller the call payment against delivery of the paid-up shares, or partly paid rights, as the case may be.

The rules of the LSE can be found in the London Stock Exchange website.

a. Current rules are applicable as of 23 February 2016 and are subject to change.

Note: According to the SDRT rules and the ECJ ruling, new issues resulting in UK securities should not be subject to SDRT when being repatriated to the UK. However, securities incorporated in jurisdictions other than the UK, but for which a registrar in the UK exists, are subject to SDRT.

Proxy Voting procedures

Proxy voting services are available in CBL for this market. For details about the proxy voting services offered by CBL, please refer to the CBL Customer Handbook.

Entitlement compensation rules

Please refer to Clearstream Banking Entitlement Compensation Rules - UK.