Consultation Paper High level description, Nordic CSD Corporate ...

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4 Structural issues 4.1 Account structure In the document “White Paper Nordic CSD Structure Basic Principles” the following basic principle was stated; “The NCSD account structure is basically built on two different kinds of securities accounts; investor accounts and intermediary accounts and defined as follows: Investor accounts: the account holder is regarded as owner of the securities which are credited to the account. Intermediary accounts: the account holder is regarded not as the owner but as an intermediary who has securities credited to the account on behalf of its customer (one or many).” What is today regarded as a nominee account would be interpreted to be an intermediary account in this Consultation Paper. The term Account Operator/Nominee is used in this Consultation Paper when talking about intermediary account holders. This section elaborates further on the account structure, first with a section from the C&S Consultation Paper (section 3.3). The next section, 4.1.2, contains additional account structure issues related to the Corporate Action area. The below description of a NCSD ‘securities memorandum account’ corresponds to proposals regarding Corporate Action harmonisation in NCSD. Even if the general idea is that an investor or intermediary of any nationality will be able to have any security in the CSD system technically credited and treated in the same way as if it was a domestic security, it is worth noting that domestic legal requirements might lead to differences in how different securities are handled on the securities memorandum account. page 16(62)
4.1.1 Securities account structure Background, drivers and requirements Participants would prefer to have an account that can hold any security defined in the CSD system. This would allow investors and intermediaries to have all their holdings on one account. It should also be possible for an investor or intermediary of any nationality to have any security in the CSD system technically credited and treated in the same way as if it were a domestic security. This would simplify and streamline routines for participants as they would not have to have separate accounts in each CSD. The memorandum account would give them “one view” or “one account”. In addition, from an operational point of view, “one account” would streamline reconciliation processes and discrepancy handling. Proposal [ID 13] One account that can hold any security in the system. Reference: High level description, Nordic clearing and settlement model: Proposal [ID: 13] The CSD system should facilitate functionality, an NCSD ‘securities memorandum account’, which can record any security, held in the CSD system. Each security should be connected to a primary CSD. Hence, the CSD accounts for each security would be governed by the legislation of the respective primary CSD. The NCSD account should be a ‘securities memorandum account’, where the recordings would reflect holdings on local CSD accounts, governed by legislation of the primary CSD. Information regarding local CSD accounts is available to participants through the NCSD account ID. Settlement instructions should also be processed through the NCSD ‘securities memorandum account’. All processing relating to the securities will be performed under local jurisdictions allowing straight forward application of the respective Companies act. Participants need to comply with local requirements relating to administration and entering registrations on CSD accounts. Hence, formally, in order to register settlement instructions in a particular security, participants have to be a local member (Account Operator) under the legislation of the primary CSD of that security. page 17(62)
Page 1 and 2: NCSD Title Corporate Action Consult
Page 3 and 4: 6.1 DEFINITIONS AND ABBREVIATIONS .
Page 5 and 6: Nordic Corporate Action model and t
Page 7 and 8: Participant roles have been covered
Page 9 and 10: 1.4 Guidelines for reading and resp
Page 11 and 12: 2 Executive summary The Nordic Sing
Page 13 and 14: 3 International initiatives and sta
Page 15: ECSDA Corporate Action standards an
Page 19 and 20: outines in place for the currency i
Page 21 and 22: settlement of a specific security,
Page 23 and 24: participants would need local membe
Page 25 and 26: Investor 1 Investor 2 Issuer Issuin
Page 27 and 28: Figure 5: Access areas for the Issu
Page 29 and 30: 4.3 Securities Database Background,
Page 31 and 32: We aim to achieve a harmonised busi
Page 33 and 34: 5.3 Definition of key dates and ent
Page 35 and 36: that the relationship, especially r
Page 37 and 38: database. This would among other th
Page 39 and 40: Action related notifications from N
Page 41 and 42: Proposal [CA 22] Issuing Agents sho
Page 43 and 44: 5.5.2 Mandatory distributions witho
Page 45 and 46: choose from two or several options
Page 47 and 48: Once the distribution of the rights
Page 49 and 50: The automated market claims functio
Page 51 and 52: Dependencies and implications In or
Page 53 and 54: Proposal [ID: 7C] Check for payment
Page 55 and 56: Dependencies and implications Autom
Page 57 and 58: A consequence of integrating the Co
Page 59 and 60: Interim shares A share that an inve
Page 61 and 62: 6.2 Appendix II - Working Group Par

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