Transaction management rules – Finland

27.11.2023

Market claims

Overview

Detection

Yes

Processing

Yes

Detection

Detection period

20 T2S opening days after the record date

Eligible corporate action events

All income and non-income distribution events in cash and securities

Eligible transactions for detection

Internal:

All as of status matched

External:

All as of status matched

Detection key dates

Events on securities in units:

  • Trade date
  • Ex-date
  • Record date
  • Effective settlement date

Events on securities in nominal:

  • Record date
  • Intended settlement date
  • Effective settlement date

Processing

Eligible transactions for processing

Securities in units:

All as of status matched

Securities in nominal:

Settled

Opt-out/Ex/Cum indicator

Supported as additional matching field.

Characteristics of generated market claim instructions



Internal:

  • Transaction code “CLAI”
  • Status unmatched  
  • Same trade date as per underlying instruction
  • Settlement date being the payment date of the underlying event
  • Partial settlement indicator as per underlying instruction (always NPAR for claims in cash)
  • On-hold/release status as per underlying instruction at the time the market claim instruction is created

External:

  • Transaction code “CLAI”
  • Cash and securities proceeds are compensated upon receipt of confirmation from the local agent.

Applicable to CBL clients only. Market claims between the CBF/LuxCSD client and domestic counterparty are n/a since the CBF/LuxCSD client must first transfer its holding to a CBL/ICSD account to trade with a domestic counterparty.

Market specifics

Market claims in non-T2S currencies and securities:

  • Internal: No specifics
  • External: Not processed

Market claims are processed for:

  • Mandatory cash distributions without options
  • Mandatory cash distributions with options
  • Mandatory security distributions without options

External market claims will not be generated for:

  • Reverse market claims

Taxation of market claims

Type of market claim

Withholding tax rate

Compensation basis

Tax relief available

Tax reclaim available

Cash dividend

35%

Net

Y

Y

Interest payment

0%

n/a

n/a

n/a

Further
specifics

The Finnish Tax Authorities (FTA) had recently clarified the notion of “cash compensation” and the tax treatment of cash compensation in the form of guidance published on the FTA’s website, available under Withholding taxation, tax-at-source, and annual information returns in the financial sector - vero.fi.

Clearstream Banking is working to clarify the new rules and will update this section in due course.

Market claims scenarios

Scenarios for market claims detection for securities in unit

TD before Ex-datea

ISD before or on RD

ASD before or on RD

Opt-out indicator

Ex/Cum indicator

Market claim to be created (T2S rules)

Direction

Y

n/a

N

Blank

Blank/Cum

Y

From Seller to Buyer

N

n/a

N

Blank

Cum

Y

From Seller to Buyer

N

n/a

Y

Blank

Blank/Ex

Yb

From Buyer to Seller

Y

n/a

Y

Blank

Ex

Yb

From Buyer to Seller

a. N means TD => Ex-Date but TD <= RD. 
b. Reverse market claims

Scenarios for market claim detection for securities in nominal

TD before Ex-datea

ISD before or on RD

ASD before or on RD

Opt-out indicator

Ex/Cum indicator

Market claim to be created
(T2S rules)

Direction

Issuer CSD
compliance

Y/N

Y

N

Blank

n/a

Y

From Seller to Buyer

Y  

a. N means TD => Ex-Date but TD <= RD. 

No market claim detection for transactions in which opt-out is present

TD before
Ex-datea

ISD before or on RD

ASD before or on RD

Opt-out indicator

Ex/Cum indicator

Market
claim to be created
(T2S rules)

Direction

n/a

n/a

n/a

Opt-out

n/a

N

n/a

a. N means TD => Ex-Date but TD <= RD. 

Transformations

Overview

Transformation cancellation

Yes

Transformation reinstruction

Yes

Detection and cancellation

Detection period

20 T2S opening days after the record date

Eligible corporate action events

All income and non-income mandatory reorganisation events in cash and securities

Eligible transactions for detection/cancellation

Internal and external:

Status matched, but still pending


Detection key dates

Mandatory reorganisation events without options:

  • Record date

Mandatory reorganisation events with options:

  • Market deadline

Processing

Eligible transactions for processing

Internal:

Detected and cancelled

External:

Detected and cancelled

Opt-out indicator

Supported as additional matching field.

Characteristics of reinstruction instructions



Internal:

  • Transaction condition “TRAN”
  • Status unmatched
  • Same trade date as per underlying instruction
  • Settlement date being the latest date between the payment date of the underlying event and the intended settlement date of the underlying instruction
  • Partial settlement indicator as per underlying instruction (always NPAR for claims in cash)
  • On-hold/release status as per underlying instruction

External:

  • Cash and securities proceeds are reinstructed upon the receipt of the  settlement confirmation from local agents.

Applicable to CBL clients only. Transformations between CBF/LuxCSD client and domestic counterparty are n/a since CBF/LuxCSD client must first transfer its holding to CBL/ICSD account to trade with a domestic counterparty.




Market specifics





Reinstruction transactions in non-T2S currencies and securities:

  • Internal: No specific
  • External: Not processed

Transformation scenarios

Reorganisation event type

Cancellation instruction to be created

Opt-out Indicator

Transformed instruction to be created

MAND

Y

Blank

Y

MAND

Y

Opt-out

N

CHOS

Y

Blank

Y (using the default option)

CHOS

Y

Opt-out

N

VOLU

N

Blank

N

VOLU

N

Opt-out

N

Buyer protection

Subject to Manual Buyer Protection mechanism.


Additional information is available in the CBL Client Handbook, OneClearstream Client Handbook and LuxCSD Client Handbook.