We have taken a look at the first detailed information released by the CSD. Austria and summed them up for our readers.
By Tina Fischer, GSS Austria
Since the first market briefing by the Austrian Central Securities Depository (CSD.Austria) regarding the introduction of the EU Record Date concept in Austria in July last year, a lot has been accomplished.
The Corporate Actions National Implementation Group (CANIG) has prepared examples and FAQs that should guide market participants (issuers, CSD, CCP.A, Vienna Stock Exchange, banks) through the implementation of the EU Record Date, as defined in the European Market Standards for Corporate Actions Processing (MSCA, version 2012).
The details
Currently, the documents are only available in German so we would like to provide the readers of the GSS Newsletter with a summary of the most important details currently available in English:
• The implementation of the European Record Date concept, as defined in the MSCA, has no impact on Austrian Legislation (e.g. Stock Corporation Act) since it will be introduced as Market Standard.
• The new Market Standard is scheduled to come into effect on 16 November 2015; however no final decision has been made on the date.
• As per the MSCA, the Market Standards apply to all securities used for direct investments (equities, fixed income instruments) deposited and settled in book entry form with an (I)CSD in Europe. Investment funds listed and traded on a regulated trading venue should be processed, where possible, in accordance with the applicable standards.
• Types of Corporate Actions and new Key Dates:
- Cash Dividend:
Key Dates: Ex-Date, Record Date (New) and Payment Date
Definition of Record Date: Ex-Date plus 1 Business Day (i.e. Ex-Date plus Settlement Cycle T+2 minus 1 Business Day) Definition of Payment Date: Record Date plus minimum 1 Business Day
- Coupon Payment:
Key Dates: Record Date (New) and Payment Date
Definition of Record Date: Payment Date minus 1 Business Day
- Shares / Rights Distribution: Key Dates: Ex-Date, Record Date (New) and Payment Date (New)
Definition of Record Date: Ex-Date plus 1 Business Day (i.e. Ex-Date plus Settlement Cycle T+2 minus 1 Business Day) Definition of Payment Date: Record Date plus minimum 1 Business Day
- Mandatory Reorganisations (e.g. Split, Reverse Split, Merger, Pari Passu, Spin Off):
Key Dates: Last Trading Date (New), Record Date (New) and Payment Date
Definition of Record Date: Last Trading Date plus 2 Business Days (i.e. Last Trading Date plus Settlement Cycle T+2) Definition of Payment Date: Record Date plus minimum 1 Business Day
After the processing of the Mandatory Reorganisation the security will have a new ISIN.
• The Ex-Date is defined as the date from which the underlying security is traded without the benefit / right attached to it.
• The Record Date is defined as the date on which settled positions are struck in the books of the Issuer (I)CSD at close of business to determine the entitlement to the proceeds of a Corporate Action.
• It is important to note that in the case of an announcement of a corporate event by the issuer or issuer agent with Ex-Date and Payment Date only (e.g. investment funds cash dividend with Ex-Date and Payment Date the same day), the processing of the event will be made according to the current Market Practice (i.e. Ex-Date rules).
First-hand information
UniCredit Bank Austria, a delegate of which is the chairman of CANIG Austria, will continue to closely monitor and analyse the impacts on our clients as the changes are designed and discussed by CANIG Austria and we will inform our clients of any further news in due course.