Asset servicing - France

04.03.2020

For the specific services on the French market, please refer to the Market Profile – France.

Please refer to the relevant CBL, CBF OneClearstream, or LuxCSD Customer Handbook for information about processing, reporting and connectivity for asset servicing.

This section covers the following business processes:

  • Event announcement and entitlement forecast;
  • Decision management;
  • Payment management;
  • Transaction management;
  • Proxy voting services.

Event announcement and entitlement forecast

Event announcements for French issued securities are created based on the information received from the asset servicing provider for this market (BNP Paribas Securities Services, Paris).

Event announcements are generated with both the Clearstream corporate action reference and the Corporate Action Official Reference (COAF) as applied on the market.

Event announcement for predictable events

The events BPUT, EXWA and CONV are handled as non-predictable events in the French market. They are notified as soon as announced by the French Issuer CSD (Euroclear France).

Predictable events (INTR, REDM, PCAL, PRED and DRAW) are usually announced as from PD-45 calendar days.

Event announcement for unpredictable events

Clearstream 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.

French DVOP event

Event notifications will include gross and net (of the applicable/default tax rate) reinvestment options.

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 based on the final MT566 received from the asset servicing provider.

The payment is reported via MT564 IPAR and Xact Web Portal IPAR.
 

French Foreign Tax Credit (FTC)

FTC adjustment is made when part of the dividend paid by the French distributing company has been paid out of profits received from its foreign subsidiary. The amount of FTC adjustment is announced on or after the dividend date and added to the net dividend (gross basis) to determine the nonresident price. CAEV and CORP ID remain the same as the main dividend event whenever the FTC is announced, be it before or after the main dividend PD. Clearstream applies a gross/net FTC calculation at customer account level and includes this information in the event notifications.

For further information about event announcements and entitlement forecast processing and reporting, please refer to the relevant Customer Handbook and to Market asset servicing – France.

Decision management

Instructions for predictable events

Customers may instruct Clearstream 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.

Instructions for unpredictable events

Clearstream collects and processes customer instructions for voluntary events, such as subscription offer, choice dividend, reinvestment option, exchange offer, purchase offer, merger with instruction etc. The most common voluntary event on the French market is the choice dividend.

For further information about decision management processing and reporting, please refer to the relevant Customer Handbook.

French Optional Dividend (DVOP)

For a given DVOP option, customer instructions must include the applicable tax rate and the Beneficial Owner (BO) breakdown. An instruction for option SECU and a separate instruction for option CASH with the applicable tax rate are required.

Capital increases

If a capital increase is oversubscribed, the following procedures shall apply:

  • Classic subscription via rights
    Customers elect to receive new shares based on the ratio of the subscription versus a subscription cash amount and the exercise of the corresponding number of rights. These subscriptions are fully served.

  • Oversubscription
    Oversubscription allows holders of rights that have participated in the classic subscription to request additional shares (versus the subscription amount) above and beyond their rights entitlement, but without the assurance that these additional shares will be made available.
    Clearstream requires that, for each of their oversubscription instructions per final beneficiary, customers specify the number of rights exercised in the classic subscription.

Payment management

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 based on the final MT566 received from the asset servicing provider. The payment is reported via MT564 IPAR and Xact Web Portal IPAR.

For French taxable securities, Clearstream acts as local withholding tax agent. Clearstream collects and processes all information from customers necessary to apply the adequate taxation. Cash distributions are received gross from the agent and are made net of the customer's applicable withholding tax rate.

Fonds Communs de Créance (FCC)

Interest and redemption on FCC are paid in one single payment.

French DVOP payment

The DVOP payment is received gross from the market and Clearstream is responsible for the tax calculation and payment breakdown at customer account level based on received BO details.

French Foreign Tax Credit (FTC)

Clearstream being a withholding tax agent calculates the entitled net amount and generates the FTC payment to the underlying customers via T2S.

For further information on the payment management processing and reporting, please refer to the relevant Customer Handbook.

Transaction management

Please refer to Transaction Management in T2S.

Market claims and reverse market claims

For the French market rules for market claims and reverse market claims, please refer to Transaction management rules – France.

Clearstream detects and process the market claims and reverse market claims on against payment and free of payment instructions of its customers as of status matched, as follows: 

Market claims and reverse market claims on CBL customer transactions


Internal

Bridge

Domestic

Detection

Yes

Yes

Yes

Compensation 

Yes

No

Yes

Market claims and reverse market claims on CBF OneClearstream customer transactions


Intra-CSDa

(CBF-CBF, CBF-CBL) 

Cross-CSD

(CBF – LuxCSD)

Cross-CSD

(CBF – T2S counterparty)

Detection

Yes

Yes

Yes

Compensation

Yesb

Yesb

Yesc

a. Including Eurex Clearing and LION related trades (subject to specific rules).

b. Market claims and reverse market claims in non-T2S eligible currencies and securities are processed on the corresponding CBF-i or CBL account of the CBF customers.      

c. Excluding non-T2S eligible currencies and securities.

Market claims and reverse market claims on LuxCSD customer transactions


Intra-CSD

(LuxCSD - LuxCSD, LuxCSD - CBL) 

Cross-CSD

(LuxCSD – CBF)

Cross-CSD

(LuxCSD – T2S counterparty)

Detection

Yes

Yes

Yes

Compensation

Yesa

Yesa

Yesb

a. Market claims and reverse market claims in non-T2S eligible currency/securities are processed on the corresponding CBL accounts of the LuxCSD customers.

b. Excluding non-T2S eligible currencies and securities.

Both market claims instructions, in cash and in securities, are processed via matching settlement instructions generated on behalf of customer accounts, flagged as follows:


ICP customers

MT54x

DCP customers 

sese.023/sese.025

Market claim and reverse market claim instruction

:22F::SETR//CLAI

Transaction code: CLAI

Detected market claims are reported to customers in  the Custody Market Claims report and via MT564 Claim and Reversal Advice. 

Debits/credits resulting from market claims and reverse market claims compensations are reported in the Custody Market Claims report and via MT564 Claim and Reversal Advice. 

The market claims and reverse market claims are visible in CreationOnline (CBL customers only) and in Xact Web Portal.

For further information on the processing and reporting, please refer to the relevant Customer Handbook.

Transformations

For the French market rules for transformations, please refer to Transaction management rules – France.

Clearstream detects and process the transformations on pending matched against payment and free of payment instructions of its customers, as follows: 

Transformations on CBL customer transactions


Internal

Bridge

Domestic

Detection

Yes

Yes

Yes

Cancellation  

Yes

Yes

Yes

Re-instruction

Yes

No

Yes

Transformations on CBF OneClearstream customer transactions


Intra-CSDa

(CBF-CBF, CBF-CBL) 

Cross-CSD

(CBF – LuxCSD)

Cross-CSD

(CBF – T2S counterparty)

Detection

Yes

Yes

Yes

Cancellation  

Yes

Yes

Yes

Re-instruction

Yesb

Yesb

Yesc

a. Including LION related trades (subject to specific rules).

b. Re-instructions in non-T2S eligible currency/securities are processed on the corresponding CBF-i/CBL accounts of the CBF customers.   

c. Re-instructions in non-T2S eligible currency/securities.

Transformations on LuxCSD customer transactions


Intra-CSD

(LuxCSD - LuxCSD, LuxCSD - CBL) 

Cross-CSD

(LuxCSD – CBF)

Cross-CSD

(LuxCSD – T2S counterparty)

Detection

Yes

Yes

Yes

Cancellation  

Yes

Yes

Yes

Re-instruction

Yesa

Yesa

Yesb

a. Re-instructions in non-T2S eligible currency/securities are processed on the corresponding CBL accounts of the LuxCSD customers.

b. Re-instructions in non-T2S eligible currency/securities.

Both re-instructions, in cash and in securities, are processed via matching settlement instructions generated on behalf of customer accounts, flagged as follows.


ICP customers

MT54x

DCP customers 

sese.023/sese.025

Re-instructions in securities

:22F::SETR//as in the underlying instruction

:22F:STCO//TRAN

Transaction code: as in the underlying instruction

Transaction condition: TRAN        

Re-instructions in cash

:22F::SETR//CORP

:22F::STCO//TRAN

Transaction code: CORP

Transaction condition: TRAN

Transformations are subject to settlement reporting.  

For further information on the processing and reporting, please refer to the relevant Customer Handbook. 

Buyer protection 

For the French market rules for buyer protection, please refer to Transaction management rules – France.

Clearstream does not introduce an automated buyer protection infrastructure. Instead buyer protection will be handled bilaterally between the counterparties, that is, outside the CSD environment.

In order to comply with the Corporate Actions standards on manual buyer protection, customers must use the Corporate Actions Joint Working Group (CAJWG) Buyer protection invocation template for corporate actions if the requested option is not the default option, referencing the corporate action, the chosen option(s), the quantity of securities and the underlying transaction in the template. The template must be sent electronically (via fax or email) to the seller.

When provided on the market, the below key buyer protection dates will be included in Clearstream MT564 Corporate Action Notifications:

  • Election to counterparty deadline in :98a::ECPD and
  • Guaranteed participation date in :98a::GUPA.

For further information on the processing and reporting, please refer to the relevant Customer Handbook. 

Proxy Voting procedures

Proxy voting services are available in Clearstream for this market.

For details on the proxy voting services offered by Clearstream, please refer to the relevant Customer Handbook.