CSD Settlement of TEFRA D securities
According to the TEFRA D rules (relating to the U.S. Securities and Exchange Act of 1933 regulations on U.S. securities sold abroad), no U.S. citizen, or anybody who has been resident in the U.S.A. for longer than 183 days, may buy a TEFRA D security in the first 40 calendar days after the date of issue. This must be checked by the depository and reported to Clearstream Banking AG, Frankfurt (CBF).
CBF offers its customers a standard ‘strict’ procedure and an alternative ‘flexible’ procedure for the technical checking and monitoring of compliance with this law.
Due to the tax implications of TEFRA D and the choice of procedure, CBF does not assist in this regard, and customers are urged to consult their tax advisers.