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ES - IBERCLEAR transformation procedure amended

25/09/2018

On 11 June 2018, IBERCLEAR, the Spanish central securities depository (CSD), has amended its transformation process in order to avoid the need for counterparties to bilaterally agree on reinstructing new trades in the ordinary or new ISIN at the end of a rights issue or any other type of ISIN transformation, when a trade remains unmatched on record date.

On 11 June 2018, IBERCLEAR, the Spanish central securities depository (CSD), has amended its transformation process in order to avoid the need for counterparties to bilaterally agree on reinstructing new trades in the ordinary or new ISIN at the end of a rights issue or any other type of ISIN transformation, when a trade remains unmatched on record date. 

At the end of the market deadline, Iberclear transform all bilateral trades of rights or an expired ISIN, that are matched but pending, into trades of temporary ISIN code with a nominal of zero shares against cash, or shares with zero cash, as the case may be.If the failed buyer does not wish to have this new procedure applied, both parties must send the "Optout" indicator in their instructions.

In addition, the T2S Corporate Action SubGroup has made a Change Request to allow market participants and central counterparties (CCP) to instruct trades on an expired ISIN during the transformation period of 20 working days after record date or market deadline. In order to accommodate this request, Iberclear has updated its transformation procedure so that instructions on expired ISINs sent by participants or CCPs could match but not settle and once matched they will be transformed by the CSD.

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