Cross-border securities settlement and risk analysis framework for ...

CROSS-BORDER SECURITIES SETTLEMENT ANDRISK ANALYSIS FRAMEWORK FOR CROSS-BORDER LINKSAnnex 1 : Risk Analysis FrameworkLegal riskTopic 1 :The regulatory authorisation of the intermediary / issuer (I)CSD to act lawfully as the intermediary / issuer (I)CSDon behalf of the investor (I)CSDQuestion1. Has the investor (I)CSD been confirmed that the intermediary / issuer (I)CSD has obtained all necessary consents,licences, approvals, authorisations or exemptions from any government or any regulatory authority or agency in thelocal jurisdiction, required in connection with the execution, delivery or performance of the terms of the contract ?Topic 2 :The validity and enforceability of the agreement between the intermediary / issuer (I)CSD and the investor(I)CSDQuestions1. Does the contractual framework between the intermediary / issuer (I)CSD and the investor (I)CSD constitute a validand enforceable agreement, under applicable law ?2. Is a Legal Opinion available that covers the validity and enforceability of the contractual framework between theintermediary / issuer (I)CSD and the investor (I)CSD ?3. Is the Legal Opinion that covers the validity and enforceability of the contractual framework sufficiently recent orrecently updated ?Topic 3 :The eligibility of the securities to be admitted within the system of the investor (I)CSDQuestions1. Does the nature of the securities held at the issuer (I)CSD allow the internal circulation of such securities withinthe system of the investor (I)CSD established in Belgium ; i.e. under the legal regime of the Royal Decree N° 62 ? (1)2. Is it permissible to hold the securities with the issuer (I)CSD in an omnibus account and / or as a nominee in thejurisdiction of the issuer (I)CSD ?3. Is it obligatory to obtain a local licence to hold securities with the issuer (I)CSD as a nominee (or otherwise) inthis jurisdiction or to settle transactions in such securities ?4. Are there any holding or ownership restrictions or disclosure requirements with respect to securities held withthe issuer (I)CSD applicable to the investor (I)CSD ?(1) Royal Decree N° 62 dated 10 November 1967 governs the deposit, transfer and pledge of securities held on a fungible basis. Fungibility refers to the method of holdingsecurities by an (I)CSD or other financial intermediary in which each of a number of issues of physical or dematerialised securities are held in separate fungible pools.No owner has the right to any particular physical or dematerialised security in a particular pool, but has a co-ownership right to such an amount of physical or dematerialisedsecurities as shown in its account with an (I)CSD or other financial intermediary.135