Scope - Clearstream

1. ISMAG Best Practices
1.1.
1.1.1.
ISMAG best practices described in detail within the Market Practice Book are
summarised in this section.
B EST PRACTICES - MARKET PRACTICE BOOK
The best practices are defined mainly for upstream parties, i.e. Issuers, their Legal
counsels and their Agents, to address inefficiencies and risks linked to information
provision processes, being:
• Information coverage: quality & completeness
• Information timeliness
• Information processing
The adherence to and usage of the best practices, e.g. how to best draft
documentation at issuance of an international security and/or how to best
communicate the subsequent income and corporate actions notification information
during the life cycle of this security, will to a large extent ensure an efficient and
effective service to investors.
Information coverage
Implementation of ISMAG taxonomy and checklists by all upstream parties in the
processing chain will ensure completeness and common understanding of
information related to the servicing of international securities.
Generic recommendations
At Issuance of a security (or an event)
Improve communication between front, middle & back offices (including ICSDs)
before issuance of specific structure securities and/or launch of unpredictable
events; this maintains flexibility and innovation in the market, while avoiding asset
servicing issues directly impacting end investors. Structures created by front
office sales teams may be tailor-made for investors’ needs but are not necessarily
manageable in a straightforward manner. These structures may, from a back office
view, create unforeseen operational risks which impact end investors, e.g. some
date fixing principles described in the T&C are not feasible in reality to enable
timely income distribution or even use of funds on the due income payment date.
Ensure that draft information listed in securities or programme T&C is complete
and expressed as per ISMAG Stand Alone Acceptance and Eligibility Checklist or
Programme Acceptance Checklist (Annex 5).
Ensure that final information listed in securities T&C is complete and expressed as
per ISMAG Asset Servicing Checklists (Annex 6A), according to each event to be
described; and as per ISMAG Specific recommendations “Do’s/Don’ts” on
Paperwork, Day Count Conventions, Interest Period Adjustment, Record Dates,
Payment Business Days, Units/Nominal terminology, etc.
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