Payment of yield in the OM system Decision of Euroclear Finland s CEO To: Issuers Account operators Clearing parties Issuer agents Reference to the Rules: 3.3.20 Ratified: 29 April 2015 Entry into force: 30 April 2015 Supersedes: the Decision in force as of 1 January 2014
CONTENT 1. SCOPE OF APPLICATION... 3 2. PURPOSE AND AIMS OF THE DECISION... 3 3. DEFINITIONS... 3 4. EUROCLEAR FINLAND S LIABILITIES AND RESPONSIBILITIES... 6 5. LIABILITIES AND RESPONSIBILITIES OF THE ACCOUNT OPERATOR... 9 6. RESPONSIBILITIES OF THE ISSUER... 12 7. RESPONSIBILITIES OF THE ACCOUNT BANK... 15 8. CORRECTIONS TO BE MADE TO YIELD PAYMENTS... 16 2(18)
1. Scope of application This decision shall provide for the responsibilities of and the division of liabilities between the parties in the payment of monetary yield in the OM system as well as in corrections to be made in the payment of yield. The Decision shall apply, when necessary and upon a separate agreement in each case, to other monetary payments made by the issuer in the OM system. 2. Purpose and aims of the Decision This Decision shall secure the handling of the payment of yield in the book-entry system in a manner securing the interests of all parties. The parties may, when necessary, agree with the issuer on the compliance with other procedures in the payment of yield than those in accordance with this Decision. 3. Definitions Preliminary tax withholding shall refer a preliminary tax withholding defined in the Act on Preliminary Tax withholding (1118/1996). Ex date shall refer to a date when the book-entry is subject to trading the first time without the right to yield payment, after the date of the meeting of the issuer s governing body deciding on the yield payment. Ex date shall not be applied to the yield payments of the debt-rated book-entries. Transfer of deposits shall refer to the cash payment made by an issuer or by the account bank for the payment of yield to an account operator as instructed by the account operator. Periodic tax return shall refer to a periodic tax return defined in the Tax Account Act (604/2009). Target month shall refer to a target month defined in the Tax Account Act (604/2009). Tax at Source shall refer to a tax defined in the Act on Taxation of Non-resident Income (627/1978). Correction period I shall refer to the period between the record date and the payment date. An account operator may correct the yield data in its sub-register and provide tax information pertaining to the yield payment for the payment date during this period. Correction period I will commence on the record date +1 and ends two days prior to the 3(18)
payment date at 15:30 EET. Correction period I shall not be applied to the debt-rated book-entries. Correction period II shall refer to the period between the payment date and the last banking day of the month when the yield payment was made. An account operator may correct the yield data in its subregister and provide tax information pertaining to the yield payment to the periodic tax return during this period. Correction period III shall refer to the period between the completion of the first periodic tax return and the last banking day of the calendar year of the yield payment. An account operator may correct the yield data and the periodic tax return during this period. Tax Withheld at Source from Interest shall refer to a tax defined in the Act on Tax Withheld at Source from Interest (1341/1990). Tax at Source shall refer to a tax defined in the Act on Taxation of Non-resident Income (627/1978). Issuer agent shall refer to an issuer s manager, who acts in the OM System and to whom special responsibilities have been assigned to in accordance with Euroclear Finland s Rules and the Managing Director s Decisions that have been issued on the basis of the Rules. Payment instruction shall refer to an instruction from Euroclear Finland to an issuer for the transfer of deposits or an instruction from Euroclear Finland to an account operator for the payment of taxes. Payment date of the yield shall refer to the date determined by the issuer when the account operator shall pay the yield to the recipients of the yield. The determination of the payment date of the yield shall be provided for in the Rules of Euroclear Finland. Registration day refers to the date when the book-entry register or its relevant part is in operation. Electronic dividend form shall mean a service offered to the issuer by Euroclear Finland for the delivering of the preliminary information and the confirmation. Upon application the issuer is granted issuer specific personal passwords to use the service. TaxMill Platform shall refer to the service provided by Euroclear Finland via which the pieces of information on the dividend and interest payments provided by account operators will be compiled and delivered to issuers. Euroclear Finland will deliver periodic tax returns pertaining to yield payments account operator specifically to the Tax Administration and to the issuer s tax account. Account bank shall refer to a bank selected by the issuer with which the issuer has made an agreement on the transfer of deposits. The 4(18)
issuer may select the account bank in connection with the payment of dividends and the payment of capital interest of a co-operative. The issuer shall select the account bank in connection with the payment of interest or capital refund relating to loan units. Income tax shall refer to a tax defined in the Income Tax Act (1535/1992). Yield shall refer to a dividend, interest, a payment made for a depository receipt, warrant, fund unit, or a foreign book entry or a capital refund of debt or equity capital and capital interest of a cooperative and guarantee shares paid in cash in euros. Record date shall refer to - a date referred to in Chapter 4, Section 2 subsection 3 of the Companies Act and to be determined by the company, on the basis of the share register of which the dividend shall be paid, - a date referred to in Chapter 15, Section 2 of the Cooperatives Act and to be determined by the cooperative, on the basis of the member register of which the assets are shared, - a date referred to in Section 65 of Unit Trust Act and to be determined by the Fund Company, on the basis of the list of owners of which the yield shall be paid, or - a date that the issuer of a depository receipt or a foreign security has determined to be the date according to which the right of the holders of the depository receipts or the foreign security to receive payments relating to a foreign security shall be determined on the basis of the information on the book-entry accounts. - a date referred to in Chapter 4, Section 1 of the Insurance Companies Act and Chapter 4, Section 2 subsection 3 of the Companies Act to be determined by the company on the basis of the share register of which the interest shall be paid to a guarantee share The record date of the warrants shall be the date of expiration of the warrant. The record date of a debt-rated book-entry shall be the registration day preceding the payment date unless otherwise stated in the prospectus/program/final terms of the debt-rated book-entry. The record date shall be stipulated by the Rules of Euroclear Finland. Foreign institution shall refer to a foreign organisation referred to in section 6.1.1 of the Rules of Euroclear Finland. Tax account shall refer to a tax account defined in the Tax Account Act (604/2009). Expiry date of a warrant shall refer here to the fifth (5.) registration day following the last trading day of a warrant. 5(18)
Performance date for an exercise of a warrant shall refer here to a banking day on which the payment relating to the exercise of a warrant shall be paid to the recipients, or a settlement day in the OM system, on which the share deliveries shall be made to the recipients in the book-entry system. The provisions of this Decision on a company or on a cooperative shall, where applicable, apply also to the issuer of a depositary receipt, unit of a mutual fund, or of a warrant. 4. Euroclear Finland s liabilities and responsibilities 4.1. Euroclear Finland shall ensure that the issuers in the OM system shall be in compliance with the Rules of Euroclear Finland and the procedure described in this decision when determining the record date of the yield payment and the payment date. The record date shall be determined so that a clearing period in force at any given time and complied with in the OM -system shall remain between the meeting date of the governing body deciding on the payment of yield and the record date. Then the right to the yield payments in the transactions concerning a share, a depositary receipt or a fund unit are transferred to the buyer for transactions concluded on the date of the meeting of the governing body deciding on the payment of yields but not for transactions concluded thereafter (ex-date or after that). With regard to warrants Euroclear Finland shall with the provisions defined in this decision and on request by the issuer, accept the record date and the payment date. 4.2. Payments relating to foreign book-entries incorporated in the bookentry system on the basis of an agreement between Euroclear Finland and a foreign institution shall be made in accordance with the principles of Section 7, Subsection 3 of the Act on the Book-Entry System and Clearing Operations (749/2012) so that the provisions of the law or of the Rules and Decisions of Euroclear Finland on an issuer shall not be applied to an issuer of a foreign security. With regard to foreign bookentries, Euroclear Finland shall attend to the transfer of the payment from the foreign institution to the account operator. The provisions of this Decision shall, where applicable, apply to the payment transfer. 4.3. Euroclear Finland shall submit to account operators, as advance information based on the yield proposal, the information on the yield as soon as the issuer has published it and Euroclear Finland has been notified thereof in accordance with section 6.1 below. If the issuer has not confirmed that the information referred to in Section 10 Subsection 1 of the Act on Taxation of Non-resident Income on the recipient of the payment may be stored by the account operators, Euroclear Finland shall inform account operators also thereof in connection with the advanced information. 6(18)
If a Foreign Institution submits to Euroclear Finland unofficial advance information on payments and their schedule, Euroclear Finland shall submit this information further for the use of the account operators. Euroclear Finland shall be liable to transfer the validating information relating to the payments (such as the issuer, ex-date, the record date, the payment date of the yield, the yield percentage/book-entry category, the yield in euros/book-entry category) from the issuer to the account operator immediately after the meeting of the governing body at which the decision was is made or after validation of yield payment and after Euroclear Finland has obtained the necessary information from the issuer. With regard to foreign book-entries incorporated into the book-entry system on the basis of an agreement between Euroclear Finland and a Foreign Institution, Euroclear Finland shall transfer the basic information obtained with the help of the foreign institution to the account operators. 4.4. Euroclear Finland shall be responsible for controlling the total balances of the book-entry-category-specific volumes in the book-entry register. 4.5. With regard to depositary receipts, foreign securities or rights related to foreign securities based on the Act on Book-Entry System and Clearing Operations, Section 7 Subsection 3, Euroclear Finland shall submit to the issuer the country-specific compilation lists to be received from the account operators on the basis of which the tax at source is possibly paid abroad on payments relating to foreign securities. Due to a missing or incomplete country specific compilation list, valid tax treaty or the practice of the Foreign Institution the holders of foreign book entries or depositary receipts may be imposed the maximum tax rate, for which the recipient may, subject to the relevant provisions and tax treaties, request a refund. The issuer and Euroclear Finland shall separately agree on the schedule for the payments of the depositary receipt category. Euroclear Finland shall separately notify the schedule for the payments of a foreign book-entry as it receives the information and payments from a Foreign Institution. 4.6. Euroclear Finland shall, where necessary, be responsible for exchanging the currency of the payment to be made for foreign book entries into euros. Euroclear Finland shall, in that case, pay the amount left after the conversion to the account operators who shall forward the payment to their customers. 7(18)
Euroclear Finland may decide that for certain yield an account operator may choose to receive the payment related to a foreign book-entry in the original payment currency. 4.7. Basic data on a yield payment that will be reported via the TaxMill Platform will be available in the TaxMill Platform after the record date. 4.8. Euroclear Finland will grant permissions to account operators to add dividend transactions till the second banking day preceding the payment date. 4.9. The total number of shares of a domestic issuer paying the yield will be available in the TaxMill Platform per account operator on the banking day following the record date. 4.10. Euroclear Finland will provide the issuer of an equity-rated book-entry with the instruction on the transfer of deposits, including a bank account number, on a banking day preceding the payment date at 11.30 a.m. at the latest. Euroclear Finland will provide the issuer of an debt-rated book-entry with the instruction on the transfer of deposits, including a bank account number, on the payment date at 9.00 a.m. at the latest. 4.11. If Euroclear Finland has been notified of a delay or a lack of the payment of the necessary balance to the payment banks, Euroclear Finland shall immediately notify account operators thereof. 4.12. In accordance with item 6.10, Euroclear Finland shall be responsible for submitting to the issuer the information needed for the payment of the remuneration on the basis of the number of the types of accounts with the account operator. 4.13. Transactions that account operators have keyed in TaxMill Platform during the month when the yield was paid and accepted by Euroclear Finland will be taken into account when compiling the periodic tax return of the target month. 4.14. Monthly reports to account operators for reconciliation purposes will be available in TaxMill Platform after the turn of the month. 4.15. Euroclear Finland will submit the periodic tax returns pertaining to domestic issuer s yield payments to issuer s tax account per tax type and account operator on behalf of the issuer on the fourth banking day 8(18)
of the month following the month when the yield was paid or at the latest on a day stipulated by the Tax Administration. Euroclear Finland will provide the issuers and account operators with a tax and account operator specific report on the pieces of information that were submitted to the issuer s tax account. Euroclear Finland will provide account operators with a tax payment instruction on taxes pertaining to yields of debt-rated book-entries after the turn of month when the yield payment was made. Taxes pertaining to a yield payment of a domestic issuer shall be made using the issuer s payment reference. Taxes pertaining to a yield payment of a nondomestic issuer shall be paid using the account operator s payment reference within the timeframe stipulated by the Tax Administration. 4.16. As a general rule, Euroclear Finland will make corrections to the issuer s tax account once a month after the correction period II. 4.17. Euroclear Finland will submit the annual information return on dividend and capital interest of a cooperative and guarantee shares to the Tax Administration. 5. Liabilities and responsibilities of the account operator The provisions of this section shall be applied to the appropriate extent to an agent of an account operator when the task is carried out by the agent. 5.1. The account operator shall furnish Euroclear Finland with information on its payment details (bank account number) well in advance prior to commencement of the account operator operations. The account operator may amend the yield payment details in the TaxMill Platform on a banking day preceding the payment date till 10.30 a.m. 5.2. The account operator shall be responsible for yield payments made in its sub-register. An account operator shall be responsible for that its personnel have sufficient knowledge on tax regulation as valid from time to time. Thus, an account operator has to ensure that its platforms used for yield payments have sufficient capacity and they are in compliance with reporting requirements as valid from time to time. 5.3. The account operator shall provide Euroclear Finland in accordance with this Decision with information on the corrections of yield payments, transfer of deposits and tax reporting pertaining to its sub-register for yield payments and periodic tax returns. 9(18)
5.4. The account operator shall act as an agent on behalf of the yield recipient in the payment as well as be responsible for the correctness of the information it has submitted to Euroclear Finland, the issuer and the Tax Administration. 5.5. The account operator shall collect information relating to the yield payment and taxation and forward the information for yield payment as well as the material for annual information returns and other accounts relating to taxation in the manner confirmed by the National Board of Taxes. If tax at source shall be withheld from the dividend payment in a process specified in Section 10 b of the Act on Taxation of Non-resident Income, the account operator shall ascertain that: the agreement between the account operator and the custodian is compliant with the requirements set in the said provision; the country of residence of the custodian is a country with which Finland has a tax treaty in force; and the custodian has been registered in the Foreign Custodian Register maintained by the Finnish tax administration at the time of the dividend payment. The account operator shall receive the particulars referred to in Section 10, Subsection 1 of the Act on Taxation of Non-resident Income of the recipient of the payment before the payment of the yield and shall keep the particulars available for the issuer, if the issuer has confirmed to Euroclear Finland that the particulars can be stored by the account operator. 5.6. The account operator shall deliver the country-specific compilation list relating to a foreign book-entry category or a depositary-receipt category in accordance with the given timeframe to Euroclear Finland, which shall forward the list to the Foreign Institution or to the issuer of the depositary receipt for the purpose of foreign tax withholding. Due to a missing or incomplete country specific compilation list, valid tax treaty or the practice of the Foreign Institution the holders of foreign book entries or depositary receipts may be imposed the maximum tax rate, for which the recipient may, subject to the relevant provisions and tax treaties, request a refund. 5.7. An account operator shall deliver dividend removal notifications and addition requests pertaining to another account operator to Euroclear Finland in due course during correction period I. Dividend removal notifications and addition requests that shall be reported via TaxMill Platform will be received and handled during correction period I till 3.00 p.m. on the second banking day preceding the payment date. An account operator shall not send information on its internal corrections. 10(18)
An account operator has to check the status of the handling of an addition request it has made in the TaxMill Platform. 5.8. An account operator shall furnish Euroclear Finland with information on the issuer s own and other holdings to which yield will not be paid to. An account operator shall check that the information in TaxMill Platform on the issuer s own and other holdings which yield will not be paid to is correct. An account operator shall furnish Euroclear Finland with information on the changes to such holdings held on the record date. 5.9. An account operator shall check the information of yield payments in its sub-register and furnish Euroclear Finland with information on the amount of taxes pertaining to a yield payment for the transfer of deposits and periodic tax returns. Tax specific division on taxes that shall be reported via TaxMill Platform has to be keyed in on a banking day preceding the payment date at 10.30 a.m. at the latest for the transfer of deposits. An account operator shall notify separately in the tax specific division those yields that will be paid to book-entry accounts linked to long term saving schemes. 5.10. If an account operator does not receive the necessary balance for the payment of yield from the issuer in accordance with the schedule provided in this decision, it shall immediately inform the issuer and Euroclear Finland thereof. 5.11. If the payment of the yield is delayed on account of lack of balance, an account operator shall preserve the payment and other data required for the payment, which are necessary for the completion of the payment, in such a manner that the payment can be completed at a later time. This data shall be preserved until the issuer announces or it is otherwise evident, that the payment will not be completed, however not later than until the general regulations concerning accounting material require. 5.12. Account operators may make yield tax corrections, addition requests and removal notifications in the TaxMill Platform during correction period II from the payment date till the last banking day of the payment month. Account operators shall make in the TaxMill Platform also such internal tax corrections that affect the periodic tax returns. 5.13. An account operator shall key in the tax specific division pertaining to an interest payment in the TaxMill Platform during the month when the interest was paid. 5.14. After the turn of the month an account operator shall reconcile the yield transactions and taxes related to them. A compilation report of the yields and taxes related to them reported via the TaxMill Platform will 11(18)
be delivered to account operators. The account operator shall reconcile the report with the yield transactions and balances it has saved for itself. The reconciliation has to be done and the corrections of possible discrepancies rectified on the third banking day after turn of the month when the payment was made at the latest. 5.15. After an interest payment account operators may make corrections, additions and removals in the TaxMill Platform during the calendar year when the interest payment was made. An account operator shall pay the tax withheld from interest to the Tax Administration s bank account as instructed by the Tax Administration. When paying taxes withheld from interest paid by a domestic issuer an account operator shall use the payment reference of the issuer delivered by Euroclear Finland. When paying taxes withheld from interest paid by a non-domestic issuer an account operator shall use the payment reference of the account operator. 5.16. After the turn of the year an account operator has to reconcile the yield payments and taxes related to them of the previous year. A compilation report of the yields and taxes related to them reported via the TaxMill Platform will be delivered to account operators. The account operator shall reconcile the report with its own annual information reports and recipient specific material. An account operator shall confirm the result of the reconciliation and separately report the corrections to Euroclear Finland within a specified timeframe before Euroclear Finland delivers the annual information return to the Tax Administration. 5.17. After the turn of the year when the yield payment was made an account operator shall make the corrections related to yield payments as instructed by the Tax Administration outside the TaxMill Platform. 6. Responsibilities of the issuer 6.1. An issuer shall notify Euroclear Finland immediately of advance information on the payment of yield, as soon as the issuer has decided upon a proposal concerning the payment of yield and, where applicable, issued the proposal in a stock exchange release in accordance with the rules of the marketplace. The notification shall be made to Euroclear Finland concerning a limited liability company by sending the preliminary information on the payment of dividends with an electric dividend form. With regard to other yield payments, from which the preliminary information shall be notified, the notification shall be made by sending a preliminary information form on a yield payment by e-mail to Euroclear Finland. By sending the notification to Euroclear Finland the 12(18)
issuer also assigns the carrying out of the payment to Euroclear Finland and to the account operators in accordance with 3.3.15 3.3.21 of the Euroclear Finland Rules. The issuer shall confirm in a preliminary information form relating to dividend payment, that the particulars of the recipient of the payment submitted in accordance with Section 10, Subsection 1 of the Act on Taxation of Non-resident Income for withholding of the tax at source shall be received and kept available for the issuer by the account operators. If the issuer does not give such confirmation but receives and keeps the particulars of the recipient of the payment by itself, it shall take into account the delivery process relating to the particulars and the duration of the process when planning the payment schedule, as well as verify the schedule separately with Euroclear Finland. In addition the issuer shall confirm in a preliminary information form, whether it s payment of dividend shall be considered as dividend from a public company in accordance with Section 33a of the Income Tax Act. 6.2. An issuer shall validate the information concerning the payment of yield to Euroclear Finland immediately after the meeting of the governing body at which the decision was made or after validation of yield payment. The issuer of a debt-rated book-entry shall validate the data concerning the payment of yield one week before the payment date of the interest or capital repayment at the latest. If the interest for a debt-rated bookentry is determined at a later time, the issuer shall validate the data concerning the payment of yield three Registration Days before the payment date at the latest. The validation shall be made by sending an electric dividend form concerning the dividend payment to Euroclear Finland. In other yield payments the validation shall be made by sending a confirmation form to Euroclear Finland by fax or e-mail. 6.3. The issuer of a warrant shall determine that the performance date for an exercise of a warrant shall be no earlier than the third banking day or settlement day in the OM system after the expiry date of the warrant. The issuer of a warrant shall also notify and agree with Euroclear Finland the terms and conditions for the execution of the warrant no later than on the second registration day after the last trading day of the warrant. 6.4. The issuer shall notify Euroclear Finland and the account operator managing the account in which the book-entries issued and owned by the issuer itself are, if the issuer does not pay yield to such bookentries. The notification shall be made immediately after the meeting of the governing body at which the decision on yield payment is made. 13(18)
6.5. An issuer shall select an account bank for yield and redemption payments related to debt-rated book-entries. 6.6. An issuer shall be responsible for that the account bank confirms to Euroclear Finland at 3.00 p.m. at the latest on the banking day preceding the payment date that the payment can be made. 6.7. An issuer shall be responsible for the transfer of deposits to the account operators in accordance with payment instruction no later than 1.00 p.m. on the banking day preceding the payment date of equity-rated book-entries no later than 10.00 a.m. on the date of commencement of the payment of debt-rated book-entries. 6.8. Notify Euroclear Finland and the account operators immediately, if the issuer does not pay the balance necessary for the payment of yield in accordance with the schedule set forth here. The issuer shall be liable to compensate the account operators and Euroclear Finland any costs arising out of divergence from the schedule. 6.9. An issuer shall arrange the transfer of deposits during correction period III at least once a month for yield corrections, tax refunds and aftermarket exchanges in accordance with the payment instruction from Euroclear Finland. 6.10. An Issuer shall pay to the account operators the remuneration in accordance with Euroclear Finland s price list in force at any given time after having received from Euroclear Finland an account on the payment of the yield. Euroclear Finland shall submit the account to the issuer on the second banking day after the payment date of the yield. The issuer shall pay the remuneration resulting from the payment of dividends in connection with after-market exchanges on the basis of information submitted by Euroclear Finland. 6.11. An Issuer shall be responsible for attending to the withholding of tax at source in accordance with the Act on Taxation of Non-resident Income and performing the tax deductions and their disbursement to the tax authority in accordance with the provisions on taxation. Euroclear Finland shall submit to the tax authorities on behalf of the issuer annual summaries in accordance with the provisions on taxation. 6.12. In addition, the issuer of a depositary receipt, foreign security or a right related to a foreign security in accordance with the Section 7 Subsection 3 of the Act on Book-Entry System and Clearing Operations shall, with regard to foreign securities, be responsible for dealing with the tax at source possibly relating to foreign securities in the home 14(18)
country of the issuer, making payments in euros as well as for exchanging the currency, where necessary, and reporting to Euroclear Finland the tax at source possibly withheld abroad. The issuer shall also be responsible for making payments to the correct recipients on the basis of conversions performed between the depositary receipts and foreign securities during payment. In accordance with the valid tax treaty and foreign practice, payments relating to foreign book entries forming the underlying of depositary receipts, foreign securities or rights related to foreign securities in accordance with the Section 7 Subsection 3 of the Act on Book-Entry System and Clearing Operations, may be made subject to the maximum tax, for which the recipient may, subject to the relevant provisions and tax treaties, request a refund. 6.13. The issuer shall authorise Euroclear Finland Ltd (business ID 1061446-0) to make periodic tax returns and corrections related to them. The issuer shall grant Euroclear Finland Ltd a Katso user identification with which Euroclear Finland Ltd may deliver the pieces of information mentioned in this decision to the issuer s tax account. The authorisation shall apply only to the tax types as follows: 68 Amount withheld from interest paid out 92 Amount withheld from dividend paid out 39 Tax at source withheld from dividend (paid out to nonresidents) 69 Tax at source withheld from interest and (paid out to nonresidents) 84 Tax at source withheld from interest income (for Finnish tax residents). The issuer shall furnish Euroclear Finland Ltd with information on its payment reference. Euroclear Finland Ltd shall forward the number to account operators for the payment of taxes related to interest payments. 7. Responsibilities of the account bank 7.1. The account bank shall confirm to Euroclear Finland, by 3.00 p.m. on the banking day preceding the date of payment of a debt-related bookentry that payment may be made. 15(18)
8. Corrections to be made to yield payments 8.1. Corrections to be made to dividend payments 8.1.1. Obligation to correct The clearing party shall undertake to ensure that dividends are paid to the party to whom they belong under the terms of a transaction. If the trade date of a trade is the date of the meeting of the governing body deciding on a dividend at the latest, the shares to be delivered in connection with the settlement shall include dividend, if the clearing parties have not agreed otherwise and established this separately. The clearing parties shall pay special attention when accepting a postponement of a settlement date for a trade past the record date of the dividend because Euroclear Finland and account operators will not take into account trade cum dividend automatically. Thus, the clearing parties shall immediately send the notifications in accordance with sections 12.1.2, 12.1.3 and 12.1.4 of this decision and the delivering clearing party shall attend to the correction of the dividends in a manner to be agreed between the clearing parties, if the settlement date is postponed past the record date. The clearing party shall, without delay, submit to the customer s account operator a request to remove the payment of dividend as well as issue the necessary notifications regarding the removal to the other party and to Euroclear Finland. Removals relating to dividends shall be made during the correction period I of the dividend. Corrections relating to the payment of dividend in transactions concluded outside the marketplace may be made also after the trade has been cleared. Also the issuer shall participate in making corrections in the payments relating to depositary receipts together with the clearing party in question when the payment has to be transferred to the party to whom it belongs under the terms of a transaction due to conversions performed between the depositary certificates and foreign book entries. A clearing party shall use the removal notification form, the supplement request form and the dividend correction form as specified by Euroclear Finland when carrying out the tasks under section 12. 8.1.2. Request for the removal or supplement of dividends to the account operator The transferring clearing party shall send a notification on the removal of the payment of dividends to the customer s account operator. The removal notification form shall be sent to the account operator without delay, however, by no later than the day following the record date. For transactions concluded outside the marketplace, requests for the removal or supplement of dividends may be made also after the day following the record date. 16(18)
The receiving clearing party shall submit a request for supplementing the dividend to the account operator on behalf of the customer on the same day as the transaction entitling to dividends is registered in the account of the customer. 8.1.3. Notification to the other party The transferring clearing party shall fax a notification to the other party to the transaction stating that the dividends included in the transaction have been removed from the payment of dividends and that they may be transferred from the transferor to the transferee. If the dividends are payable to the seller from another clearing transaction, the seller shall notify that it was not possible to effect removal but that the dividends are payable from the purchase. 8.1.4. Notification to Euroclear Finland After sending the transferee clearing party notification on the dividends, the transferring clearing party shall complete the Euroclear Finland section of the form, the HEXClear references of all the clearings of which the dividends relating to the sale consist. Thereafter the form shall be faxed to Euroclear Finland. The clearing party shall also always notify Euroclear Finland when registrations relating to an internal transaction of the clearing party are made in two or more account operators. 8.1.5. Corrections to the payment of dividends after the correction period I If dividends are paid to the correct recipient pursuant to the information in the book-entry system but erroneously in respect of the information of a trade, payment of dividends shall be corrected. The transferring clearing party shall ensure that a removal relating to the dividends is made in the customer s account and that the customer refunds the dividends erroneously paid to him. The account operator of the customer shall refund the dividends to the company that has paid the dividend. The transferring clearing party shall send a notification on the removal of the payment of dividends to the customer s account operator. The acquiring clearing party shall issue a supplement request relating to the payment of dividend to the customer s account operator after the transaction has been cleared. The account operator shall send the addition request including tax information to Euroclear Finland which shall forward it the issuer for payment. 8.1.6. Monetary compensation Monetary compensations shall be handled outside the OM system. 17(18)
If the dividends cannot be refunded and the yield transaction cancelled or and the dividends have not been paid to the transferring clearing party but the transferring clearing party is obliged to transfer shares cum-dividend to the transferee, the transferor shall pay as compensation the amount of euros which, by taking into consideration recipient s direct tax implications would correspond with the amount of euros recipient would have received net initially on the basis of the dividends. Compensation shall be paid in total at the same time. The receiving clearing party shall deliver to transferring clearing party information about the state of taxation and other substantial information from the fiscal point of view for the purposes of defining the amount of monetary compensation. 8.2. Corrections to be made to other yield payments The clearing parties and account operators shall be responsible for corrections to redemptions and payments of the yield from warrants, units in a mutual fund and. The clearing parties and account operators shall not be liable to make the notifications or requests for supplement or removal to Euroclear Finland as referred to in section 12.1 above for such payments. 8.3. The timing of corrections The clearing party and account operator shall make all corrections relating to the payment of dividends or yields without delay. If dividend ambiguities are connected to the clearing transactions of a clearing party, the clearing party shall report them to Euroclear Finland at the latest within one month from the record date. 18(18)