Income processing CSD
In its role as central securities depository (CSD) for collective safe custody (CSC) securities, Clearstream allocates income and redemption payments on due or maturity dates. These events are processed via the CASCADE platform. Basis for the settlement is provided by the customers' securities account positions held in CSC.
For transactions with CSC securities classes that are traded ‘cum’ and settled ‘ex’, Clearstream handles market claims.
For securities transactions settled in CSC, where the trade date is on or after the ex date, and the booking date is on or prior to the record date, Clearstream implements reverse claims.
A detailed account of the compensation rules, including the criteria for the selection of transactions and the event types can be found in the Compensation Handbook.
Event lifecycle monitoring
Processing relevant information of income events is already communicated during the admission of CSC (for example, interest payments and final maturity) or has to be communicated to Clearstream (for example, dividend payments, interest fixings for floaters, early redemptions) by the issuer, paying agent or lead manager.
Clearstream publishes this data via the WSS/CBF online query (for example via WSS Online Plus).
Customers can access information in relation to forthcoming income events that is relevant for their positions 14 business days prior to the ex date through the online information function. Pre-advice concerning an event is updated daily until settlement occurs on the Clearstream entitlement date.
In addition, customers have the option of obtaining pre-advice relevant for their positions via the SWIFT MT564 service. A first SWIFT MT564 message on an event is sent out as from the 30th business day prior to the ex date. Further SWIFT MT564 messages will follow, up until the Clearstream entitlement date; and on the Clearstream key/entitlement date itself, if the event data is modified, or if the customer acquires new positions in the securities class affected. To support their own cash processing, customers can order a SWIFT MT564 REPE report on the basis of their positions. They receive this two business days before the payment date. The SWIFT MT564 informs in real time about short term changes of income event data on the Clearstream entitlement date, and about cancellations and corrections after the entitlement date.
The SWIFT MT564 service is also available to customers acting as a paying agent. In this case the messages include the total position and the collection data.
Details concerning SWIFT services for income events are to be found in the Connectivity Handbook.
Cash settlement and relevant information
Cash settlement takes place on payment date. In the case of German securities, this usually coincides with the ex date. In the case of non-German securities classes, this date can be different. The amount paid out, less tax if applicable, is debited to the paying agent and credited to customers with entitled positions.
Reversal and re-processing
If the settlement of an income event is reversed, CASCADE makes offsetting entries in order to restore the original state of affairs before settlement was carried out. This also includes the generation of cancellations for market/reverse claim payments that have already taken place.
The market/reverse claim-relevant transactions will be identified at the end of the real-time processing on the business day.