Since 01.07.2016, corporate actions related to share buybacks and preemptive rights to acquire securities are carried out only through a chain of nominal holders, except for personal accounts opened directly with the registrar.
Since 20.11.2017, the ability to submit instructions for corporate actions related to early redemption/acquisition of bonds by the issuer has been implemented.
NSD provides depositors with services for participation of persons exercising rights to securities in the following voluntary corporate actions:
A person exercising rights to securities makes a decision on their participation in a voluntary corporate action, which involves submitting CA instructions. Through a CA instruction, the person exercising rights to securities must choose one of the corporate action options.
During corporate actions, message exchange between NSD and depositors is carried out in ISO20022 and ISO15022 formats through the following communication channels:
To initiate a corporate action, the issuer or a third party must provide a CA notification to all market participants. At NSD, the notification is received through the registrar or issuer/its representative (for BPUT CA) and is sent to depositors in ISO formats via the communication channel selected in the EDQ questionnaire or established under operation 97.
Types of messages used:
The CA notification contains structured essential information about the corporate action, including corporate action execution options.
Corporate action options:
By default, it is assumed that the person exercising rights to securities does not participate in the voluntary corporate action. Thus, if no CA instruction is provided, the person exercising rights to securities should not expect movement of securities or cash within the submitted notification.
The CA notification indicates the status of information, which at certain stages of the corporate action may be incomplete or unconfirmed. For example, when the placement price is unknown for preemptive rights, the information is incomplete, or for share buybacks under Article 75 before the meeting makes a decision, the buyback information is unconfirmed. Corresponding codes are used in messages to display the information status.
Information status according to ISO20022 (ISO15022):
The CA notification contains the CA type and corporate action reference, which must be used in all related message types.
A person exercising rights to securities may participate in a voluntary corporate action by selecting their participation option according to the received corporate action notification. To do this, a corporate action instruction must be provided. Upon instruction processing, a message with the corresponding status is sent by NSD and the registrar.
Interaction with depositors during execution of voluntary corporate action instructions with securities of Russian issuers is regulated by the following documents:
Separate requirements for CA instructions depending on CA type:
To participate in a voluntary corporate action, information about the person exercising rights to securities must be disclosed when providing the CA instruction. NSD uses unified rules for identifying persons exercising rights to securities in CA instructions.
For reliable instruction processing, it is recommended to specify as much information as possible about the person exercising rights to securities and their identifiers, however, minimally the following data must be specified in the CA instruction:
Name/FIO,
Address,
Country
or
Name/FIO,
Any identifier
In CA instructions in ISO15022 format, only the SWIFT BIC of the person exercising rights to securities may be specified, then their name data will be determined according to the SWIFT directory. In this case, the name of the person exercising rights to securities and the specified SWIFT BIC will be transmitted to the registrar in the CA instruction.
Specifying the depository where the securities of the person exercising rights to securities are recorded is mandatory for CA instructions. To identify the depository of the person exercising rights to securities, the international LEI code must be used. If the depository's LEI code is unknown, then in CA instructions in ISO20022 format, OGRN may be used, and in ISO15022 format – SWIFT BIC.
When voluntary corporate actions are related to a general shareholders' meeting, data about the person exercising rights to securities and their depository, previously provided for the meeting, may change by the time the CA instruction is provided. In this case, the CA instruction provides two blocks for identifying the person exercising rights to securities and their depository: "current" (BnfclOwnrDtls (OWND)) and "old" (BnfclOwnrOldDtls (OLDB)). In the block with "old" details, data previously provided for the meeting is filled. "Old" details are available for corporate actions with types BIDS and PRIO, which are related to the meeting and have a record date. A similar approach with two blocks may be used for trust management in cases where the founder of management participated in the meeting, and in the resulting corporate action – the trustee itself.
Depending on the type of securities accounts, information about the person exercising rights to securities is filled by depositors in the following order:
According to legislation, when conducting securities buybacks, restrictions are imposed on securities, therefore securities blocking is provided for corporate actions BIDS, TEND and BPUT.
When intending to cancel a previously submitted CA instruction, the depositor sends a CA instruction cancellation request to NSD. Upon processing the CA instruction cancellation request, the depositor receives a message with the status of the CA instruction cancellation request and the status of the original CA instruction.
In case of insufficient funds for securities being bought back after the deadline for payment of securities under corporate actions related to buyback (BIDS and TEND), persons exercising rights to securities may extend the restrictions on securities presented for buyback. To extend restrictions within the timeframes established by legislation, NSD depositors provide an instruction to maintain blocking and receive reports according to the list presented below.
When exercising preemptive rights (PRIO) in cases where the placement price of new securities is unknown, payment is made by the person exercising rights to securities after providing the CA instruction. In this regard, there is a need to transmit information about securities payment to the issuer. In this case, a separate message type in form CA382 may be used in connection with the previously provided CA instruction CA331. In response to message CA382, the status of such message is sent both by NSD and by the registrar. SN041 – message accepted or AM021 – message rejected.
Processing of CA instructions, CA instruction cancellation requests, instructions to maintain blocking and other documents:
After the submission deadline, the CA instruction may go through stages such as calculation of securities quantity and cash according to CA results, as well as final movement of securities and cash.
Upon summarizing buyback results (BIDS, TEND) and after receiving the statement from the registrar, depositors are sent a preliminary notification for each CA instruction indicating the quantity of securities that will be debited and for which cash will be paid.
For preemptive rights, preliminary movement notifications are not sent because each instruction is executed individually within the established timeframe.
For securities buybacks, cash is paid to the depositor's details linked to the securities account. NSD forms one general payment order for all CA instructions within the depositor's securities account. NSD pays cash simultaneously for all received CA instructions. The exception is BPUT with per-instruction settlement feature. For such CA, cash is paid for each instruction separately, as they are received from the issuer/registrar.
For preemptive rights, the person exercising rights to securities sends cash directly to the securities issuer's account. NSD does not participate in this process.
For buybacks (BIDS and TEND), securities are debited only after operation execution/reconciliation with the registrar. According to legislation, the registrar has 3 days to execute the order from NSD to debit securities. Securities that did not participate in the corporate action will be unblocked simultaneously with the debiting of securities. All submitted CA instructions are executed simultaneously.
For preemptive rights, after operation execution/reconciliation with the registrar, securities are credited to section 88 of the securities account or to the clearing securities account sub-account, depending on which account the CA instruction was submitted for. Securities crediting is carried out separately for each CA instruction, not simultaneously for all submitted CA instructions.
Corporate action execution schemes:
If the buying entity in TEND CA is a Mutual Fund Management Company, the corporate action is conducted with features described in the presentation due to the inability to open a personal account for the Mutual Fund Management Company in the shareholders' register.
A fee is charged for processing instructions according to the Tariffs for Payment of Depository Services:
Message formats used during voluntary corporate actions with securities of Russian issuers are presented in the section "Specifications of Electronic Documents Used by NSD during Corporate Actions".
Web Cabinet connection instruction and information on all NSD communication channels is posted in the section "Software".