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

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1 Introduction 1.1 Background This Consultation Paper sets out requirements and proposals for a Nordic Corporate Actions model. It also covers some high level requirements related to payments, account structure and participant roles. The Nordic Single (NS) project aims to supply a system and service structure well-suited as a Single Service Platform for depository, settlement and Corporate Action systems within the Nordic markets. Requirements have been developed together with market participants. The NS work was initially carried out with a group of NCSD participants (Clearing & Settlement participants and Account Operators) which form a Strategic Advisory Board (SAB) for the project and the Securities Dealers Associations in Sweden and Finland. Based on bilateral meetings and discussions in SAB, basic principles for a Nordic CSD have been stated in the White Paper “Nordic CSD Structure, Basic Principles” 2005-06-17, updated 2005-11-24. The overall characteristics of the Nordic CSD Model stated in the White Paper “Nordic CSD Structure, Basic Principles” are • Transparency and Open Access • Nordic Harmonisation and Connectivity • Single Service Platform • Flexible Structure • Based on International Industry Standards Cornerstones of the Nordic CSD Model are close relation with the Issuers, flexible account structure, single settlement engine and single interface. After the publication of the White Paper two working groups were initiated to continue the high level requirement work in the areas of Corporate Actions and Clearing & Settlement. Also another Strategic Advisory Board was formed of Issuer representatives from Sweden and Finland. page 4(62)
Nordic Corporate Action model and the high-level requirement work has been carried out in a Working Group consisting of specialists from the SAB participant organisations and NCSD. The Working Group has analysed current Corporate Action processes in the Nordic region and based on the White Paper “Nordic CSD Structure, Basic Principles” outlined high-level requirements and proposals for the Nordic Corporate Action model. The Working Group prepared a High Level Requirements Report on some of the most common Corporate Action processes for equities. The processes and the requirements related to them were discussed in workshop sessions. Fixed income area and some other securities (currently issued in the Nordic CSDs) were mainly analysed by NCSD specialists who, during the work, interviewed several specialists in the participant organisations. The common and structural issues presented in this Consultation Paper have been prepared in NCSD internal work. Also these proposals and requirements have been discussed in the workshops. 1.2 Objective, scope and methodology The objectives of this Consultation Paper are to outline the basic requirements of the NCSD business model in the Corporate Actions area, to increase awareness among the market participants and clients of the likely forthcoming changes and to receive information on the views and preferences of interested parties on the high-level requirements. The business model will be based on the requirements. The key components are the services which will be the NCSD core services, possible addititional services for the participants and what would not be part of the NCSD services. Corporate Actions cover a wide variety of processes in a number of markets. It has been agreed to use the ECSDA Corporate Action definition which reads as follows: Corporate Actions cover all the processes which arise from the announcement by an Issuer or his agent that an event affecting holders of the relevant security is to take place up until the moment when all effects of that event are complete. Corporate Actions cover the following process areas: • Incorporation of securities page 5(62)
Page 1 and 2: NCSD Title Corporate Action Consult
Page 3: 6.1 DEFINITIONS AND ABBREVIATIONS .
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 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
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Dependencies and implications Autom
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A consequence of integrating the Co
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Interim shares A share that an inve
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6.2 Appendix II - Working Group Par
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