Securities Market Practice - Corporate Actions - ASX

1 SMPG Corporate Actions Global Market Practice - Part 1 Disclaimer The Securities Market Practice Group is a group of experts who devote their time on a voluntary basis to define global and local Market practices for the benefit of the Securities industry. The Market Practice documentation and recommendations produced by this organization are intended to solve common problems across the Securities industry, from which financial institutions can derive clear benefits, to harmonize business processes and to facilitate the usage of message protocols ISO 15022 and ISO 20022. While the Securities Market Practice Group encourages the implementation of the Market practices it develops, it is up to the financial institutions within each Market to implement the Market practices according to their needs and agreements with their business counterparts to support their businesses as efficient as possible.

2 Status: Final Version: SR2012 Publication Date: 21 February 2012 Author: SMPG SMPG Corporate Actions - Global Market Practice : Part 1 SR2012 Page 2 21 February 2012 Table of Contents 1 Introduction .. 6 Revision Record .. 6 SMPG Market Practice Documents Overview .. 6 Scope of this document .. 7 Yearly Release Schedule .. 9 Documents Maintenance .. 9 2 Category of Events and Flows .. 10 Categories of events .. 10 Communication flows .. 10 Mandatory Events Flows .. 10 Mandatory Events Flows With Entitlement Date Close to Payment Date .. 12 Mandatory with Options Events Flows .. 12 Voluntary Events Flows .. 13 Voluntary Rolling Events Flows .. 14 Instruction Phase Flows .. 14 ISO 15022 messages .. 15 MT 564 Message Sending Sequence .. 15 3 Notification Message (MT 564).

3 16 Generic Elements of a notification .. 16 Function of the message.. 16 NEWM .. 16 REPE .. 17 ADDB .. 17 Cancel versus Withdrawal.. 17 Should a CANC be used or a REPL? .. 17 On Late announcement and well known events .. 18 Announcement status .. 18 On COMP .. 18 On ENTL .. 19 On INFO .. 19 Event Category .. 19 Event type .. 19 References .. 19 Senders Reference .. 19 Corporate Action Reference .. 20 Official Corporate Action Event Reference .. 20 Linkages .. 20 Linkage of different message types .. 20 Linkage of MT564 .. 20 Linking MT 564 and MT 568 .. 20 MT 564/568 Narrative Updates .. 21 Linking multi-parts MT564 / MT 568 Announcements (when msg size limit is reached) .. 21 Linking 2 events .. 22 Identification of Securities .. 22 How to describe a security?

4 22 On multiple deposited 22 :94B::PLIS//EXCH/XLONOn Place of Safekeeping .. 22 Account (single account, all accounts- not identified individually) .. 23 Balances .. 23 Eligible Balance .. 23 Event details .. 23 SMPG Corporate Actions - Global Market Practice : Part 1 SR2012 Page 3 21 February 2012 Date Prepared .. 23 Record Date .. 24 Ex Date .. 24 Payment Date Earliest Payment Date Value Date .. 24 Response Deadline .. 25 Announcement Date .. 25 25 General on Options .. 25 On Event Options Details and tax rates .. 27 Interest payments .. 28 On Rates Declared for more than One Share .. 28 On The Usage Of Tax Free Information: .. 29 Tax Applicability Indicator Usage .. 29 Movement Sequence Usage in the MT564 .. 30 Usage Guidelines for Narratives in the MT 564 & MT 568.

5 32 Additional Text (ADTX) .. 32 Narrative Version (TXNR) .. 32 Information Conditions (INCO) .. 32 Information to be complied with (COMP) .. 32 Offeror (OFFO) .. 32 Security Restriction (NSER) .. 33 Declaration Details (DECL) .. 33 Party Contact Narrative (PACO) .. 33 Registration Details (REGI) .. 33 Registration Details (WEBB) .. 33 Taxation Conditions (TAXE) .. 33 Disclaimer (DISC) .. 33 Name (NAME) .. 33 Basket or Index Information (BAIN) .. 33 Additional narrative remarks .. 33 Reminder .. 34 4 Movement Preliminary Advice Message (MT 564 ADDB//CAPA) .. 35 Introduction .. 35 Business Need .. 35 Usage Rules .. 35 Mandatory Events .. 35 Mandatory with Election and Voluntary Events .. 35 Replacement Preliminary Movement Advice .. 36 Cancellation of a Preliminary Movement Advice.

6 36 Business Scenarios .. 36 Scenario 1: Mandatory Event No preliminary Advice .. 38 Scenario 2: Mandatory with Election and Voluntary Event - No Preliminary Advice .. 39 Scenario 3: Mandatory Event Ex Date = Pay Date .. 40 Scenario 4: Mandatory Event .. 41 Scenario 5: Mandatory Event with Reversal of Payment .. 42 Scenario 6: Mandatory Event with Cancelled Reversal of Payment .. 43 Scenario 7: Mandatory Event with Critical Update .. 44 Scenario 8: Mandatory with Election and Voluntary Event - New Instruction .. 45 Scenario 9: Mandatory with Election Event - Cancel Instruction .. 46 Scenario 10: Mandatory with Election No Instruction Received .. 47 Scenario 11: Voluntary Event Cancel and Rebook Instruction .. 48 Scenario 12: Voluntary Event Partial Election .. 49 Scenario 13: Movement Preliminary Advice for Market Claim & Compensation and Tax Refund.

7 50 5 Instruction Message (MT 565) .. 52 Identification of option selected on an Election.. 52 Usage of option code BUYA .. 52 SMPG Corporate Actions - Global Market Practice : Part 1 SR2012 Page 4 21 February 2012 One or two SECU in case BUYA is used ? .. 53 Clarification: QINS .. 53 Instruction Cancellation .. 53 Linking MT 565 and MT 568 .. 54 6 Confirmation Message (MT 566) .. 55 On the use of the message .. 55 Linkage to Previous and Related Messages .. 55 On the use of value 55 Gross Amount .. 55 What if benefits are not distributed all at the same time? .. 55 On usage of reversal in MT 566 .. 56 Following an MT 565 Formatted with UNS as Option Number .. 56 Confirmation of sale of rights .. 56 Option Number for Credit of Rights in a Rights Issue Event (RHTS) .. 57 Movement Sequence Usage in the MT566.

8 57 7 Status Message (MT 567) .. 59 General .. 59 Event Status .. 59 Instruction and Cancellation Status .. 59 Related Reference in Instruction Status .. 59 Reporting on Standing instructions and default Actions .. 60 Agreed Process Flow for IPRC (Instruction Processing Status) .. 60 Addition recommendations on specific MT 567 usage scenarios .. 60 Reporting on Standing Instructions and default Actions .. 60 Reporting of a Delayed Payment in the MT 567 section .. 60 8 Message Independent Market practices .. 61 Official Corporate Action Event Reference (COAF) .. 61 Background .. 61 Principles .. 61 Placement Of Date, Period, Rates & Prices (DPRP) data elements .. 62 Presence of DPRP Elements per CAEV/CAMV Combination .. 63 Usage of Withholding of Foreign Tax rate (92a::WITF) in MT 564 Sequence E (566 seq.)

9 D) .. 63 Placement of non-DPRP data elements .. 63 Usage Of UKWN and OPEN for DPRP Elements .. 63 Events with multiple proceeds .. 64 Event on more than one underlying Securities .. 64 Expression of a rate .. 65 Multiple currencies with a non-convertible currency .. 65 Notification and confirmation linkage .. 65 Resulting Amount .. 65 How to indicate that Securities are blocked whenever instruction is received?.. 66 On usage of N 66 On the use of narrative 66 Fractions paid .. 66 Price per Product .. 67 Rejection of pre-advice request for confirmation message .. 67 On negative and zero balances .. 67 Offer Types .. 67 Pool factors .. 67 Usage of :92a: Rate Format Option M .. 68 Usage of UTC Offset Time For Dates .. 68 Usage of CA Option Code for Compensation of Rights Not Distributed.

10 68 Different Servicer Options for Different Deadlines .. 69 SMPG Corporate Actions - Global Market Practice : Part 1 SR2012 Page 5 21 February 2012 NOAC For VOLU Events .. 69 Usage of CA Option Code for Unknown Proceeds (PRUN) .. 69 Accrued interests with a security proceed .. 71 Payment occurrence indicator .. 71 Certification / Breakdown .. 71 Clarification on the meaning of PRPP when used in an event with ADEX .. 72 9 Market practices on Particular Events .. 73 Rights Issues .. 73 One event .. 73 Two events .. 73 Illustration: One Event .. 73 Illustration: Two Events .. 74 Confirmation of rights distribution .. 75 Sale of Rights .. 75 Rights Expiration Notification .. 75 Offer .. 75 On Payment of and principal amount and PRII .. 75 Advising distribution rates for dividend with options involving a compulsory cash rate.