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

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5 Corporate Actions It should be noted that chapter 5 covers Corporate Actions related to different types of instruments such as equities, fixed income instruments and certain derivatives. Fixed income (debt) instruments include both bonds and money market instruments. In this context derivatives refer to securities which value depends on an underlying asset such as a share, a bond or an index and which are registered in the CSD system at the time. This should not, anyway, set any limitation on the scope of future CSD services. Any unique features or special requirements due to the type of the instrument or the Corporate Action have been highlighted. If no special remarks are made the description and proposal should be considered to be general. 5.1 General objectives Our general harmonisation objectives within the Corporate Action area are: • To streamline the processing of Corporate Actions in the Nordic region; a harmonised way of processing would be beneficial both for local, Nordic and international counterparties • To enhance direct relation with the Issuers and provide high quality services for the Issuers • To strengthen the role of the Issuing Agents; harmonise the responsibilities and provide system support • To provide the market with timely and reliable Corporate Action information • Implement the ISO 15022/20022 standard where possible and where not possible use a Nordic standard (instead of country specific formats) • To create a Corporate Action environment characterised by automation and STP, eliminating manual work and hence reduce operational risk • Integrate Corporate Action transactions with settlement process when possible to enable more efficient use of securities and liquidity • Promote the use of standards being developed on a European level, especially the ECSDA Corporate Action standards. page 30(62)
We aim to achieve a harmonised business model for Corporate Actions in the Nordic countries. We base the Nordic Corporate Action model on four cornerstones: 1. direct relation with the Issuers 2. harmonised Corporate Action processes and schedules 3. Corporate Action transactions processed in the settlement engine and 4. standardised messaging and a database service for Corporate Action and securities data. These would be supported both by a flexible account structure and by flexible and modular system. In the Nordic Corporate Action model the CSD core functions would include those services and processes that can be produced in the most efficient way as central CSD functions. Efficient core services enable the participants to concentrate on value-added services which can be based on the CSD core. Single systems and service interfaces also enable the participants to streamline the system connections. CSD could also offer additional standard services attached to the accounts to the participants i.e. the participants would, at their choice, outsource some of their services to the CSD. This would only be done if there is demand from the participants and economies of scale can be reached. Dependencies The Corporate Action Working Group has addressed a number of issues related to defining a Nordic Corporate Action Model that are dependent upon the participant, account, settlement or legal structure of the CSD model. Some of these issues are dealt with in this Consultation Paper in the structural issues. Some will be analysed in the forthcoming more detailed studies, such as implementing the Issuing Agent role in Finland, automatic claim functionality and update of pending transactions in the settlement engine and multi-currency handling. There are also dependencies and implications to Nordic Corporate Action market practises and to stock exchange regulation. Further analyses on Corporate Action timelines, key dates and process descriptions require close cooperation with market participants and stock exchanges. Issuers will encounter implications especially in the areas of Corporate Action notifications, payment process, harmonised Corporate Action timelines and the account structure. The aim is to provide high-quality, harmonised services and standardised Issuer processes. This would bring page 31(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 and 16: ECSDA Corporate Action standards an
Page 17 and 18: 4.1.1 Securities account structure
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: 4.3 Securities Database Background,
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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