USA: Enhancement to distributions with options on closed-end mutual funds - revision

This announcement previously published on 29 August 2016 has been revised to update the default option possibilities. The changes have been highlighted.

Effective

immediately

distributions with options events on DTC-eligible (with place of safekeeping DTCYUS33XXX) closed-end mutual funds will be notified to customers of Clearstream Banking¹ with relevant holdings as single event “dividend option events” (previously notified in two events), with the default option varying depending on the issuer (previously the default option was always cash). These events will be reported to customers as mandatory events with choice in order to align with  local market practice.

Corporate action notifications and confirmations

Clearstream Banking will announce and process all new distributions with options for the U.S. market as received from the market for the relevant instruments. These events will be reported to holders as mandatory events with choice as follows:

Important note:

Only events allowing Clearstream Banking and holders to instruct will be notified in this way.

Instruction options for shareholders

The distributions with options will include the following options:

• CASH, to receive the cash proceeds; or
• SECU, to receive the shares as a result of a new share capital creation in exchange for the dividend (that is, dividend with option) or as a result of a cash reinvestment in the market by the issuer into additional shares of the issuing company (that is, dividend reinvestment).

The default option if no instruction has been received from the holder by the deadline will vary, depending on the issuer triggering the event.

Reporting and instructions messages formats   

Customers may refer to the Connectivity Manuals for message formats specifications.

Fees

For details regarding fees, please refer to the CBL Fee Schedule, section 4. “Custody Administration fees”.

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 CBF customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500