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4 Introduction This operational Market Practice Book (MPB), issued by the two International Central Securities Depositories (ICSDs), Euroclear Bank and <strong>Clearstream</strong> Banking, describes the best practices for operational processes in new issues, corporate actions and income for international securities primarily issued through and deposited with the ICSDs. The MPB was created in conjunction with valuable input from a wide variety of market practitioners in the international securities industry, and under the auspices of a market body, the International Securities Market Advisory Group (ISMAG). Working Groups for each of the operational streams were set up for this purpose. The role of the ISMAG is to guide and promote the design and implementation of a change programme. The programme is aimed to achieve a high degree of standardisation and operational efficiency in the issuance and asset servicing of international securities issued through the ICSDs. Different end-to-end intermediaries such as Issuers, Paying Agents, Common Depositories, ICSDs, Custodians, Lead Managers and Trade Associations are represented in ISMAG. The publication of the MPB was the first short-term objective of the ISMAG. It has been drafted to describe improvements to existing operational market practices, focusing on information provision to investors for new issues and corporate actions. The assimilated work for income will be integrated in early 2009. The independent chairman of ISMAG has agreed that the MPB reflects the main issues raised by its membership and has confirmed his support for its publication. In parallel, the Trade Associations participating in the ISMAG may issue their own recommendations to their members. The ICMA has issued a Guidance Note which sets out its view about how its members should comply with this MPB. A copy of the Guidance Note can be found in Annex 2. Medium term ISMAG objectives will focus on the quality, accuracy and transparency of such information, with an ambitious target for harmonisation by Q4 2009. Longer term objectives will include the potential introduction of Straight-Through Processing for these flows for the end of Q4 2010. Subsequent phases of the programme will be determined after market consultation and at the most appropriate point, in line with the programme timelines. For practical purposes it is recommended that the MPB be used as a framework for the impacted operational areas. This will allow each party to develop standardisation and automation, reduce errors and improve the timeliness of information flow. To facilitate the practical use of this guidebook, “quick cards”, summarising the specific role of each party involved in new issues and corporate actions information provision processes as recommended by the MPB have been developed for ease of reference. This publication will be regularly reviewed and updated to reflect changes and developments in the market.
Legal disclaimer Timing convention MARKET PRACTICE BOOK The operational practices, as described in this Market Practice Book are not intended to impose any legal or contractual obligations on market participants but aim to provide an indication of the sort of operational framework that would improve the operational flows of international securities. No reliance should be placed by anyone on any market participant following any of the processes described herein will be followed in any particular case. Views on the content of this document are welcome, and should be addressed in writing to the ISMAG Project Management Office, by emailing either ISMAG_PMO@clearstream.com or ISMAG.PMO@euroclear.com Unless otherwise stated, all deadlines of this document refer to the ICSDs’ deadlines and are expressed in a hh:mm 24-hour format, in Central European Time (CET), on any Business Day. For variations to those ICSDs’ deadlines, please refer to the individual contractual service descriptions of each party. 5
Page 1 and 2: December 2008 International Securit
Page 3: Table of contents MARKET PRACTICE B
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