Mandatory Cash Distribution

Mandatory - Cash Entitlement Claim

Status: Best Practice Finalised, Last Updated: 28/01/2022

Description:
This section outlines the minimum fields required for a cash entitlement claim.

Best Practice:
Alongside an authorised SSI (https://www.islaemea.org/isla-best-practice-handbook/section/IBP-105/" target="_blank">see here for ISLA Best Practice regarding SSIs), a standard cash entitlement claim should include the following key fields:

• Country

• Stock

• Sedol/ISIN

• Nominal

• Event

• Record Date (If applicable)

• Pay Date

• Tax Rate (If applicable)

• Election

• Entitlement Rate

• Entitlement Due

For further information concerning mandatory cash entitlements please see https://www.islaemea.org/isla-best-practice-handbook/subsection/COAC-107/" target="_blank">here. (COAC-141)

Shares Premium Dividend (SHPR)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
This corporate event pays shareholders an amount in cash issued from the shares premium reserve. It is similar to a dividend but with different tax implications.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found https://www.islaemea.org/isla-best-practice-handbook/subsection/COAC-141/" target="_blank">here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-38)

Interest Payment wWith Principal (PRII)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
An event which consists of two components, the decrease of the amortized value of a pool factor security and an interest payment.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found https://www.islaemea.org/isla-best-practice-handbook/subsection/COAC-141/" target="_blank">here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-37)

Instalment Call (PPMT)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
Instalment towards the purchase of equity capital, subject to an agreement between an issuer and a purchaser.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found https://www.islaemea.org/isla-best-practice-handbook/subsection/COAC-141/" target="_blank">here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-36)

Interest Payment (INTR)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
Interest payment distributed to holders of an interest- bearing asset.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found https://www.islaemea.org/isla-best-practice-handbook/subsection/COAC-141/" target="_blank">here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-35)

Cash Dividend (DVCA)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
Distribution of cash to shareholders, in proportion to their equity holding. Ordinary dividends are recurring and regular. Shareholder must take cash and may be offered a choice of currency.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-34)

Cash Distribution From Non Eligible Securities Sale (DRCA)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
Distribution to shareholders of cash resulting from the selling of non-eligible securities, for example, in the frame of a depositary receipt program.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-33)

Decrease in Value (DECR)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
Reduction of face value of a single share or the value of fund assets. The number of circulating shares/ units remains unchanged. This event may include a cash pay out to holders.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found https://www.islaemea.org/isla-best-practice-handbook/subsection/COAC-141/" target="_blank">here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-32)

Capital Gains Distribution (CAPG)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
Distribution of profits resulting from the sale of company assets, for example, Shareholders of Mutual Funds, Unit Trusts, or Sicavs are recipients of capital gains distributions which are often reinvested in additional shares of the fund.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found https://www.islaemea.org/isla-best-practice-handbook/subsection/COAC-141/" target="_blank">here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-31)

Capital Distribution (CAPD)

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NONE | Corporate Action Cluster - Economic outside SFT | Cash Move - Y

Description:
The Corporate event pays shareholders an amount in cash issued from the Capital account. There is no reduction to the face value of a single share (or the share has no par value). The number of circulating shares remains unchanged.

Best Practice:
For cash payments which do not affect the open SFT, the beneficial counterparty is contractually due payment in full on pay date. If payment is not received, counterparties should raise a query on pay date + 1.

A claim needs to submitted via email as soon as possible after announcement date in order for a payment to be made, the minimum field list for claims can be found https://www.islaemea.org/isla-best-practice-handbook/subsection/COAC-141/" target="_blank">here.

If payments are not made on pay date the recipient counterparty should provide a valid reason for non-payment.

In addition to reviewing Contract Compare prior to and on pay date, Contract Compare should be checked on pay date+1 to ensure newly created positions are reconciled. Any differences need to be escalated to counterparties immediately. (COAC-30)