uk & ie ca market practice capital returns - smpg · uk & ie ca market practice capital...

UK & IE CA Market Practice

Capital Returns

Status: Final Date: December 2016

Author: UK&IE CA NMPG

UK &IE CA National Market Practice Group Market Practice for Capital Returns In the UK & IE, Issuers return capital via a variety of means, either by

a straight cash payment,

a choice of receiving cash as an Income or Capital payment

a choice between a Capital or Income payment via the use of an Interim Security which is either repaid or upon which a dividend is paid

This document has been produced to clarify how these events should be conveyed in MT56x messages. Capital Returns without Interim Security Where no Interim Security is issued, payment can either be made as a Capital payment with no election available, or with the choice between an Income or Capital payment. Any election is made by reference to holdings in the existing security. Generally these events should be processed as a ‘Capital Distribution’ (CAPD) or ‘Capital Gains Distribution ‘(CAPG) dependent on how the Capital Payment is being generated or made. For clarification on the correct event type to be used, please refer to the Return of Capital Matrix (inc below) which is published within ‘SMPG CA Global Market Practice Part 2’, available on the www.smpg.info website.

These events can be processed as Mandatory or choice dependent on any available elections to receive payment as income or capital or a choice of currency. Capital Returns via the use of an Interim Security These events are commonly known as ‘B’ or ‘C’ Share schemes. The issuer distributes an ‘Interim Security’, which allows holders to make a choice to receive the payment as either Capital or Income or as an immediate payment or a later deferred payment. The distribution of the Interim Security should be processed as an ‘Intermediate Securities Distribution’ (RHDI). The following election event should be sent as an ‘Exchange Offer’ (EXOF). EXOF is used as the ‘Interim Security’ is being exchanged for a cash payment.

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Spanish Optional Dividends Via the allocation of Dividend Rights on a separate ISIN, Spanish issuers (Banco Santander, BBVA eg.) offer shareholders the opportunity to receive a cash dividend, or allow the cash to be reinvested in further shares or the Dividend Rights can be sold on market. An ‘Interim Security’ is distributed with holders then able to make elections. For these events it has been agreed that we should follow the Spanish market practice with the distribution of the Interim Security processed as an ‘Interim Distribution’ (RHDI) followed by the election event processed as a ‘Dividend Option’ (DVOP). A ‘Pari Passu’ (PARI) may also be used following the DVOP to transfer shares back to the underlying security.

Example MT564 Corporate Action Notifications Capital Returns without Interim Security Capital Return of GBP0.0767, straight Capital Payment, no election available. MT 564 Corporate Action Notification

M Mandatory Sequence A General Information

:16R: GENL Start of Block

M :20C:: CORP//CAPG12345 Corporate Action Reference

M :20C:: SEME//201X00010 Sender's Message Reference

O :20C:: COAF//UK201X00010Y2016 Official Corporate Action Event Reference

M :23G: NEWM New Message

M :22F:: CAEV//CAPG Corporate Action Event Indicator

M :22F:: CAMV//MAND Mandatory/Voluntary Indicator

M :25D:: PROC//COMP Processing Status

O End of Subsequence A1 Linkages

:16S: GENL End Of Block

M End of Sequence A General Information

M Mandatory Sequence B Underlying Securities

:16R: USECU Start of Block

M :35B: ISIN GG00B628S547 Identification of the Financial Instrument

M Mandatory Repetitive Subsequence B2 Account Information

:16R: ACCTINFO Start of Block

M :97A:: SAFE//NONREF Safekeeping Account

:16S: ACCTINFO End Of Block

M End of Subsequence B2 Account Information

:16S: USECU End Of Block

M End of Mandatory Sequence B Underlying Securities

R Optional Sequence D Corporate Actions Details

:16R: CADETL Start of Block

O 98A ANOU//20YY0722 Announcement Date

M :98A:: XDTE//20YY0804 Ex-Dividend or Distribution Date/Time

M :98A:: RDTE//20YY0805 Record Date/Time

:16S: CADETL End Of Block

R End of Sequence D Corporate Actions Details

O Optional Repetitive Sequence E Corporate Action Options

:16R: CAOPTN Start of Block

M :13A:: CAON//001 CA Option Number

M :22F:: CAOP//CASH Corporate Action Option Code Indicator

M :17B:: DFLT//Y Default Processing Flag

O Optional Repetitive Subsequence E2 Cash Movement

:16R: CASHMOVE Start of Block

M :22H:: CRDB//CRED Credit/Debit Indicator

M :98A:: PAYD//20YY0811 Payment Date/Time

M :90B:: OFFR//ACTU/GBP0,0767 Generic Cash Price Received per Product

:16S: CASHMOVE End Of Block

O End of Subsequence E2 Cash Movement

:16S: CAOPTN End Of Block

O End of Sequence E Corporate Action Options

Capital Return with election, no Interim Security Capital Return of GBP0.98, with holders able to choose to receive payment as Income (Dividend Payment) or Capital. No interim security issued. MT 564 Corporate Action Notification



M :20C:: CORP//CAPD12346 Corporate Action Reference




M :22F:: CAEV//CAPD Corporate Action Event Indicator

M :22F:: CAMV//CHOS Mandatory/Voluntary Indicator


End of Subsequence A1 Linkages





M :35B: ISIN IM00B28KLZ74 Identification of the Financial Instrument










O :98A: ANOU//20YY1218 Announcement Date


M :98A:: RDTE//20YY0106 Record Date/Time








O :98C:: MKDT//20YY0106130000 Market Deadline Date/Time

O :69A:: PWAL//20YY1125/20YY0106 Period of Action





M :92F:: GRSS//GBP0,98 Gross Dividend Rate



:70E: ADTX//PAYMENT AS A DIVIDEND. DEFAULT OPTION. Narrative







M :17B:: DFLT//N Default Processing Flag










O :70E: ADTX//PAYMENT AS CAPITAL. Narrative



Capital Return with election via use of Interim Security Capital Return of GBP0.032 per share via the use of Interim security. Holders have a choice to receive an immediate Capital payment or to defer it to the following tax year. RHDI event used to distribute the Interim Security, with an EXOF on the Interim security to make the election between the payments. MCAL then used at later date to redeemed the Deferred shares to receive the Deferred Redemption payment. Distribution of Interim Security MT 564 Corporate Action Notification



M :20C:: CORP//RHDI12347 Corporate Action Reference




M :22F:: CAEV//RHDI Corporate Action Event Indicator



O Start of Subsequence A1 Linkages

:16R: LINK Start of Block

O :22F:: LINK//WITH Linkage type

M :13A:: LINK//564 Linked Message type

M :20C:: CORP//EXOF12348 Linked Message reference

:16S: LINK End Of Block






M :35B: ISIN GB00B01TND91 Identification of the Financial Instrument












M :98C:: RDTE//20YY0706170000 Record Date/Time

M :22F:: RHDI//EXOF Intermediate Securities Distribution type






M :22F:: CAOP//SECU Corporate Action Option Code Indicator


O Optional Repetitive Subsequence E1 Securities Movement

:16R: SECMOVE Start of Block


:35B: ISIN GB00BZB13M92 INTERIM ENTITLEMENT Identification of the Financial Instrument


M :92D:: ADEX//1,/1, Additional for Existing Securities

:16S: SECMOVE End Of Block

O End of Subsequence E1 Securities Movement



Election on Interim Security MT 564 Corporate Action Notification



M :20C:: CORP//EXOF12348 Corporate Action Reference




M :22F:: CAEV//EXOF Corporate Action Event Indicator






R :13A:: LINK//564 Linked Message type

M :20C:: CORP//MCAL12349 Linked Message reference

:16S: LINK End of Block






M :35B: ISIN GB00BZB13M92 INTERIM ENTITLEMENT Identification of the Financial Instrument



























O :70E: ADTX//INITIAL REDEMPTION OPTION. DEFAULT OPTION. Narrative













M :35B: ISIN GB00BDD8C160 DEFERRED SHS Identification of the Financial Instrument

M :92D:: NEWO//1,/1, New to Old




O :70E: ADTX//DEFERRED REDEMPTION OPTION. Narrative



Redemption of Deferred Shares (Deferred Payment) MT 564 Corporate Action Notification



M :20C:: CORP//MCAL12349 Corporate Action Reference




M :22F:: CAEV//MCAL Corporate Action Event Indicator








M :35B: ISIN GB00BDD8C160 DEFERRED SHS Identification of the Financial Instrument











M :98A:: EFFD//20YY0427 Effective date

M :98B:: RDTE//UKWN Record Date/Time

















Spanish Dividends Optional Dividend via the use of Interim security. Holders have a choice to receive shares in lieu of the Dividend or Cash (Dividend) by selling their rights back to the issuer or cash by selling rights on the Spanish market. Pari Passu event to move the shares issued by the company from a temporary securitiy to the underlying shares. Distribution of Interim Security MT 564 Corporate Action Notification



M :20C:: CORP//RHDI12301 Corporate Action Reference




M :22F:: CAEV//RHDI Corporate Action Event Indicator




:16R: LINK Start of Block O :22F:: LINK//WITH Linkage type

M :13A:: LINK//564 Linked Message type

M :20C:: CORP//DVOP12302 Linked Message reference

:16S: LINK End Of Block






M :35B: ISIN ES0113900J37 Identification of the Financial Instrument












M :98C:: RDTE//20YY1019235900 Record Date/Time

M :22F:: RHDI//DVOP Intermediate Securities Distribution type











:35B: ISIN ES06139009N6 SUB RIGHTS Identification of the Financial Instrument


M :92D:: ADEX//1,/1, Additional for Existing Securities





Election on Interim Security MT 564 Corporate Action Notification



M :20C:: CORP//DVOP12302 Corporate Action Reference




M :22F:: CAEV//DVOP Corporate Action Event Indicator






R :13A:: LINK//564 Linked Message type

M :20C:: CORP//PARI12303 Linked Message reference

:16S: LINK End of Block






M :35B: ISIN ES06139009N6 INTERIM ENTITLEMENT Identification of the Financial Instrument























:35B:: ISIN ES0113902284 RFD

Identification of Financial Instrument

M :92D:: NEWO//1,/103, New to Old




O :70E:

ADTX//STOCK US DEFAULT FOR DI HOLDERS IN CREST AND IS ISSUER DEFAULT. ISSUER DEADLINE 29TH OCT, CREST DEADLINE 4.30PM ON 28TH OCTOBER. Narrative



Optional Repetitive Sequence E Corporate Action Options











M :92F:: GRSS//EUR0,05 Gross Dividend rate

M :92A:: TAXR//19,5



O :70E:

ADTX// ISSUER DEADLINE 29TH OCT, CREST DEADLINE 4.30PM ON 28TH OCTOBER. Narrative



Optional Repetitive Sequence E Corporate Action Options





O :98B:: MKDT//UKWN Market Deadline Date/Time

O :69C:: PWAL//UKWN Period of Action




M :98B:: PAYD//UKWN Payment Date/Time

M :92E:: OFFR//UKWN Gross Dividend rate



O :70E:

ADTX//OPTION TO SELL RIGHTS ON MARKET, CREST HOLDERS MUST WITHDRAW TO PARTICIPATE. Narrative



Pari Passu MT 564 Corporate Action Notification



M :20C:: CORP//PARI12303 Corporate Action Reference




M :22F:: CAEV//PARI Corporate Action Event Indicator







M :35B: ISIN ES0113902284 RFD Identification of the Financial Instrument











M :98B:: RDTE//UKWN Record date











M :35B:: ISIN ES0113900J37 Identification of the Financial Instrument






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