The Depozitarul Central S.A. (Romanian Central Depository in Bucharest - CSD) plans to implement the SWIFT Corporate Action communication and standardise the corporate action events processing. Based on the information provided by the CSD to its participants, the standardisation will apply to the following events:
Distributions:
- Cash distributions (dividends, coupons);
- Securities distributions (bonus shares, rights);
- Distributions with options
Reorganisation:
- Mandatory reorganisation: split or reverse split, merger, securities maturity, conversion of bonds in shares or cash;
- Voluntary reorganisation: tender offer.
In order to implement the standardisation, the CSD intends to update and set up certain rules regarding corporate action events:
- allocation rate of entitlements in financial instruments will be rounded down;
- in case of mandatory events at issuer’s reorganisations, client’s instructions will be sent by the custodian to the CSD;
- for the payment of fractions, the issuer will announce the price at the same time as the corporate action details will be disclosed;
- the payment date will be the date on which the entitlements distribution is confirmed;
- cash distribution will be performed within maximum 15 business days after the record date;
Impact on investors: Standardisation of corporate action events processing will improve the Romanian capital market infrastructure.