The View From The SMPG

Transcription

1 The View From The SMPG Bernard Lenelle 24 November, London

2 Content Introduction CAWG in numbers CAWG Achievements Key documents CA Global Market Practise Part 1 CA Global Market Practise Part 2 CA Global Market Practise Part 3 CA Event Templates SMPG and the relationship with Customers and Depositories Hot topics 27 November

3 Corporate Actions Work Group (CAWG) in figures 18 Active countries (MP creation) 28 Member Countries 17 3 Regions (EMEA, Americas, APAC) 12 Conference calls and meetings per year 313 Open Items solved since Industry Groups (ICSDs, MDPUG) Published MP documents 27 November

4 CAWG achievements (1/2) Global MP documents cover: 60+ CA events All CA business processes / Events flows "Event Interpretation Grid +" Table Recommended options and data fields for 132 types of events and also for 23 countries Complex events, Redemption events, Return of Capital events, etc 27 November

5 CAWG achievements (2/2) CA Templates document: 69 events message samples fully illustrated Yearly CRs submission to ISO15022 maintenance 27 November

6 SMPG key documents The SMPG produces yearly an array of documents but there are 4 main documents that you need to really consider: Part 1: foundation document with basic recommendations Part 2: spreadsheets containing Event Interpretation Grid Part 3: decision management (instructions and status) Event Templates: real-life examples Example footnote 27 November

7 SMPG CA Global Market Practice Part 1: Covers the following topics: Main corporate action message flows per category of events; Market practices defined per message types; Message independent market practices; Market practices on particular CA events; Market practices on market claims and interest compensation; Example footnote 27 November

8 SMPG CA Global Market Practice Part 2: Event Interpretation Grid (EIG+): the EIG defines the allowed combinations of event types and Mandatory/Voluntary indicators and for each combination, the allowed options and DPRP (Date, Period, rate, Price) data elements that may apply globally and for local markets. Short Description Definition / comments CAEV CAMV CAMV CAOP Date Period Rate Definition "Trading in security has commenced or security ACTV MAND MAND no option EFFD [O] has been re-activated after a suspension in trading" Trading Status: Active Attachment Repurchase Offer/ Issuer Bid/ Reverse Rights Retained in SR2006 maintenance on a second vote until an alternative is available for this reference data change Not considered as a Corporate Action Definition "Combination of different security types to create a unit. Units are usually comprised of warrants and bond or warrants and equity. Securities may be combined at the request of the security holder or based on market convention." Definition "Offer to existing shareholders by the issuing company to repurchase equity or other securities convertible into equity. The objective of the offer is to reduce the number of outstanding equities." Always initiated by the issuer. Always VOLU Corporate Action Event Definition "Bonus, scrip or capitalisation issue. Security holders receive additional assets free of payment from the issuer, in proportion to their holding." ATTI MAND MAND SECU PAYD [M] EARL [O] VOLU VOLU SECU NOAC BIDS VOLU VOLU CASH NOAC MAND PAYD [M] EARL [O] MKDT [O] RDDT [O] RDTE [M] EARL [O] VALU [O] MKDT [O] RDDT [O] PAYD [M] PWAL [O] PTSC [O] dividend n/a rather than investing the dividend in the market." BONU MAND MAND SECU XDTE [M] EARL [O] RDTE [M] PAYD [M] ADEX [M] GLOBAL GRID Short Description Definition / comments CAEV CAMV CAMV CAOP Date Period Rate Definition "Distribution of a dividend to shareholders with a DVOP CHOS CHOS CASH n/a choice of benefit to receive. Shareholders may choose to SECU CHOS Dividend Option receive shares or cash. To be distinguished from DRIP as the company creates new share capital in exchange for the XDTE [M] EARL [O] VALU [O] MKDT [O] RDDT [O] PAYD [M] RDTE [M] GRSS [M] NETT [O] ADEX [M] CHOS CHOS CASH SECU EARL [O] VALU [O] MKDT [O] RDDT [O] PAYD [M] PWAL [O] GRSS [M] NETT [O] NEWO [M] Example footnote 27 November

9 SMPG CA Global Market Practice Part 2: Date elements Placement Guidelines: Illustrates the allowed position(s) of the Date, Period, Rate, Price and other qualifiers as defined in the ISO MT564 and MT 566 messages for the SR2010. Complex Events Grid: This table is used to ease the selection of the appropriate CAEV code for complex events. Redemption Matrix: This table is used to ease the selection of the appropriate redemption event type by providing the key differences between the various redemptions events. Return of Capital Matrix: This table is used to ease the selection of the appropriate return of capital event type by providing the key differences between the various return of capital events. Distribution with Option table: This table gives the market practice for a rights event: either in one event using CAEV//RHTS or in two or more events using CAEV//RHDI and a second event CAEV//EXRI. Field Type DATA ELEMENTS PLACEMENT GUIDELINES Date Period Rate Price (DPRP) Recommended Placement for SR2012 Qualifier Description Sequences Available in MT564 Sequences Available in MT566 Date ANOU Announcement Date D C Usage Guideline / Comments Date AVAL Available Date E1 D1 Date CERT Certification Deadline Date D C Date CEXD Consent Expiration Date - - Removed in SR Use EXPI instead Date COAP Court Approval Date D n/a Date CORD Consent Record Date - - Removed in SR Use RDTE instead Date COUC Coupon Clipping Date - - Removed in SR2010 Date CVPR Cover Expiration Date E D Date DVCP Depository Cover Expiration Date/Time E n/a Date DIVR Dividend Ranking Date E1 D1 Date EARD Early Response Deadline Date/Time E n/a Date EARL Earliest Payment Date E1, E2 D1, D2 Date ECDT Early Closing Date D n/a Date ECPD Election to Counterparty Deadline D n/a Date EFFD Effective Date D C For events with no concept of entitlement (eg. CHAN, PLAC) or when there is a sense of eligibility (with legal obligation) eg. MRGR Date EQUL Equalization Date D C Date ETPD Early Third Party Deadline D n/a Date EXPI Expiry Date C and E D Date FDAT Further Detailed Announcement Date D n/a Date FDDT First dealing date - - Removed in SR Use AVAL instead Date FILL Filing Date D n/a Date FXDT FX Rate Fixing Date E2 D2 Date GUPA Guaranteed Participation Date/Time D n/a Date HEAR Hearing Date D n/a Date IFIX Index Fixing Date/Time D C Date LAPD Lapsed Date/Time D n/a Date LOTO Lottery Date D C Date MATU New Maturity Date D C For EXTM event only Date MCTD Market Claim Tracking End Date D n/a Date MEET Meeting Date D C Date MET2 Meeting Date 2 D n/a Date MET3 Meeting Date 3 D n/a Date MKDT Market Deadline Date E D For elective events, MKDT is expected to be included for each option whether or not the date is the same for every option. Initiation by: MAND 1 company (Issuer of underlying security) EXOF CHAN + sub codes Two or more companies (Issuer of underlying security) MRGR CHOS EXOF MRGR VOLU BIDS EXOF Issuer of Underlying Security Complex Events In the terms of the underlying security REDM, MCAL, PCAL, DRAW or CONV Third Party TEND (e.g.squeeze out) TEND (cash and/or stock) Holder Same security type CHAN + sub codes BPUT Resulting in a different security type CONV Example footnote 27 November

10 SMPG CA Global Market Practice Part 3: MT 567 Status and Reason Codes for instruction and Event processing status and : Specifies the valid combinations of Status codes and Reason codes for the MT 567. CA SMPG MT 567 Decision Table: Specifies the status and reason codes to be used according to the result of the instruction and instruction cancellation processing. Global SMPG MT567 SR2012 Detailed Note Global SMPG has reviewed all of the status reason code combinations available in SR2010 for the MT567. Comments are noted for status reason codes needing additional clarification to insure consistent usage among the industry. SR2010 Changes: IPRC/NOIN code deleted and all ESTA codes deleted. CERT Reason added for PEND and REJT Status 23G 25D 25D 24B 24B Description Comments Function Status Status Reason Reason Qualifier Code Qualifier Code 1 CAST CPRC CAND CAND CANI The corporate action instruction has been cancelled as you requested. 2 CAST CPRC CAND CAND NARR Narrative reason why the corporate action instruction was cancelled. 3 CAST CPRC CANP CANP ADEA The cancellation request is pending. Replaces CPRC/CANP/PEND/LATT The cancellation request was received after the account servicer s deadline To be sent by an account servicer when and may have been received too late to an attempt to cancel using best efforts cancel the corporate action instruction. will be made. 4 CAST CPRC CANP CANP DQUA The cancellation request is pending. Unrecognized or invalid instructed 5 CAST CPRC CANP CANP LATE The cancellation request is pending. To be sent by an account servicer when Received after the market deadline an attempt to cancel will be made after the market deadline has passed. 6 CAST CPRC CANP CANP NARR The cancellation request is pending. Narrative to be used to specify additional information. The cancellation request is denied 7 CAST CPRC REJT REJT ADEA because the cancellation instruction was received after the account servicer s deadline. 8 CAST CPRC REJT REJT DCAN The cancellation request has been denied since the corporate action instruction has already been cancelled. 9 CAST CPRC REJT REJT DPRG The cancellation request has been Use as the denial code to follow an denied because the corporate action unsuccessful best efforts attempt instruction process is in progress or (either CPRC/CANP/CANP/ADEA or has been processed. CPRC/CANP/CANP/LATE was the initial code sent). 10 CAST CPRC REJT REJT INIR The instruction is irrevocable. 11 CAST CPRC REJT REJT LATE The cancellation request is rejected. To be sent by an account servicer if a Received after the market deadline. cancellation instruction will not be processed as it has been received after the market deadline has passed. Example footnote 27 November

11 SMPG CA Event Templates (1/2) 0. BIDS: Repurchase Offer/Issuer Bid/Reverse Rights (VOLU) Definition: Offer to existing shareholders by the issuing company to repurchase equity or other securities convertible into equity. The objective of the offer is to reduce the number of outstanding equities. Issue Name: ISIN IE Terms: Shares may be tendered for cash at EUR3 per share. Holders may tender shares for Buyback at the Tender price. Relative Dates: Record date: 12 th May 20YY Market Deadline:13th May 20YY Response Deadline: 12 th May 20YY Pay date: 21 st May 20YY Transaction description: The client account (88888) has an eligible holding of 100,000 shares. Messages: MT 564 for the notification MT 565 for the instruction MT 567 for the processing status of the instruction MT 566 for the confirmation 27 November

12 SMPG CA Event Templates (2/2) MT 564 Corporate Action Notification M Mandatory Sequence A General Information :16R: GENL Start of Block M :20C:: CORP//BIDS Corporate Action Reference M :20C:: SEME// Senders reference O :20C:: COAF//BI Official Corporate Action Event Reference M :23G: NEWM Function of the message M :22F:: CAEV//BIDS Corporate Action Event Indicator M :22F:: CAMV//VOLU Mandatory/VoluntaryIndicator M :25D: PROC//COMP Processing Status :16S: GENL End of Block M End of Sequence A General Information M Mandatory Sequence B Underlying Securities :16R: USECU Start of Block M :35B: ISIN IE Underlying securities M Mandatory Repetitive Subsequence B2 Account Information :16R: ACCTINFO Start of Block M :97A:: SAFE//88888 Safekeeping Account O :93B:: ELIG//UNIT/100000, Eligible balance :16S: ACCTINFO End of Block M End of Subsequence B2 Account Information M :16S: USECU End of Block End of Mandatory Sequence B Underlying Securities R Optional Sequence D Corporate Actions Details :16R: CADETL Start of Block M :98A:: RDTE//20YY0907 Record date :16S: CADETL End of Block R End of Sequence D Corporate Actions Details O Optional Repetitive Sequence E Corporate Action Options :16R: CAOPTN Start of Block M :13A:: CAON//001 CA Option Number M :22F:: CAOP//NOAC Corporate Action Option Code Indicator M :17B:: DFLT//Y Default if no election is made O :98A:: RDDT//20YY0512 Response deadline date O :98A:: MKDT//20YY0513 Market Deadline Date :16S: CAOPTN End of Block O Optional Repetitive Sequence E Corporate Action Options :16R: CAOPTN Start of Block M :13A:: CAON//002 CA Option Number M :22F:: CAOP//CASH Corporate Action Option Code Indicator O :11A:: OPTN//EUR Currency option M :17B:: DFLT//N This is not the default O :98A:: RDDT//20YY0512 Response deadline date 27 November

13 SMPG and the relationship with Customers and Depositories Single point of truth Provides neutral and objective guidelines that can help in the case of discussions with customers and depositories Reassurance for clients Provides clear guidelines on how to structure messages and enable STP processing. It represents a key selling point 27 November

14 Hot topics Rationalisation of taxation information ISO20022 compliance of SMPG guidelines Usage of narrative (formatting) CA on investment funds Market claim messages Other specific technical topics 27 November

15

16

17 The Goal of SMPG Create globally agreed harmonised market practices which, integrated with standards, will bring the securities industry closer to achieving Straight-Through-Processing (STP). Market Practise (MP) Standards 27 November

18 The Role of SMPG Facilitate global harmonisation of market practices implementation of ISO messaging in the securities space Bring together representatives of national market practice groups approx. 40 countries, plus ICSDs (Clearstream and Euroclear) two physical meetings plus conference calls Identify commonalities and differences among national practices Identify opportunities for further harmonisation Publishing market practice rules 27 November

19 SMPG Hierarchy GLOBAL STEERING COMMITTEE Trade/ Post Trade (dormant) Settlement & Reconciliation ISO 15022/ISO Multi-asset class Process-specific Corporate Actions ISO 15022/ISO Multi-asset class Process-specific Investment Funds ISO only Funds only Cross-functional GLOBAL SECURITIES MARKET PRACTICE GROUP S&R CA IF S&R CA IF S&R CA IF DENMPG (DESSUG) LUNMPG (ALMUS) XXNMPG NATIONAL MARKET PRACTICE GROUPS (NMPG) 27 November

20 Accessibility of information (1/3) 1) Go onto 27 November

21 Accessibility of information (2/3) 2) Select Market Practices and Documents 3) Choose Corporate Action WG 27 November

22 Accessibility of information (3/3) 4) Open Final Market Practices 5) The 3 CA Global Market Practises + templates can be found here 27 November

23