Handling of reverse splits and splits in securities
Clearstream Banking AG1 informs customers, in addition to the meetings of the Market Practice Committee and the Domestic User Group in March 2021 and most recently in the Clearstream User Committee 17 March 2023, that reverse splits and splits as so-called post-issuance events (corporate actions) in securities can only be executed with an ISIN change.
In practice, this has been applied and enforced by the Primary Markets Services Germany section since April 2021. This only affects cases where CBF is the Issuer CSD, that is, the home market custodian, of these securities.
Please note that this procedure is a market standard according to CAJWG (Market Standards for Corporate Actions Processing).
Impacted post-issuance events2
The following post-issuance events are affected by the above-mentioned requirements, that is, the ISIN must be changed:
Post-issuance events with additional securities:
- Issue of subscription rights (cash subscription for new shares);
- Spin-off;
- Issue of bonus shares (new shares);
- Issue of partial rights (capital increase from company funds, new shares);
- Detachment of warrants (warrant detachment).
Reorganisation post-issuance events:
- Redemption in securities;
- Conversion of shares (for example, preference shares into ordinary shares);
- Merger (merger of shares, if a new security C is created from A and B);
- Merger (merger of funds, if A and B results in a new security C);
- Reverse stock split (reverse split or merger);
- Capital decrease (capital decrease with change in the number of securities in circulation);
- Reclassification (for example, bearer shares into registered shares);
- Pari-passu (equalisation);
- Stock split (change of par value);
- Change of denomination or amount of shares.
Further information
For questions, please contact Primary Market Services Germany - New Issues or your known contact persons.
------------------------------------------
1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.