Sub-group Corporate Actions

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Mandate

Introduction

In fullfing its initial mandate, the Corporate Actions SubGroup (CASG) delivered the standards for processing Corporate Actions (CA) on “flows” (pending transactions) to the T2S Advisory Group (AG) for approval. The AG subsequently approved the standards on 23 September 2009 and asked the CASG to prepare a mandate for its future work in supporting the implementation of the standards in relevant national markets, and to consider whether the mandate should be extended to corporate actions on stocks (settled securities positions or holdings).

CASG discussed in its October meeting the task of a renewed mandate. The members agreed to propose to the AG that CASG focuses its future work on monitoring the implementation of these standards in the T2S relevant national markets and on updating the standards as required. CASG did not consider necessary to further work on CA on stocks as this is largely been adressed by the Corporate Actions Joint Working Group (CAJWG) standards. However, the Group agreed that there is a need to ensure that there is a competent Group of experts for the discussion of CA issues in the context of T2S.

The mandate is presented to the December AG meeting for approval.

Mandate

The AG mandates the Sub-group to:

1. monitor the implementation of the AG approved standards in the T2S relevant national markets. In conducting this task, CASG should take into account the related work performed by CAJWG on the wider CA standards;
2. update and clarify the AG approved standards where required. This may be necessary as a result of market developments, changes in the wider CA market standards (CAJWG) or simply by further analysis of the CA processing in the context of T2S;
3. become the experts group for the T2S stakeholders to analyse any issues on CAs processing and management in the context of T2S. This task should focus on the interaction and impact of the adapted CSDs systems with T2S platform and not on the definition of the CSDs’ services level provision to their customers;
4. ensure that the information on CA processing in the context of T2S as presented in the Annex 12 of the URDv4.2 is updated in a new T2S documentation; and
5. provide the T2S AG with a progress report on the standards implementation status, including any other issues relevant for CAs in the context of T2S, on an annual base.

The Sub-group Chairperson should report to the AG on the progress of the Sub-group’s proceeding and seek guidance where required.

The mandate of CASG should be valid until the start of T2S operations.

Composition

The Sub-group will be composed of:

• A Chairperson, appointed by the AG Chairperson
  The Chairperson shall (1) decide on the frequency, format and agenda of the meetings; (2) conduct the Sub-group meetings; (3) invite external experts and/or ECB T2S Project Team members to the Sub-group meetings on a specific topic; (4) represent the Sub-group in liaisons with other relevant European bodies and initiatives; (5) report to the AG.
• A Rapporteur
  The Rapporteur shall be a member of the ECB T2S Project team and (1) co-ordinate the organisation of the meetings and relevant documents; (2) support the Chairperson in the preparations for the Sub-group meetings; (3) draft the outcome of the meetings; (4) support the Chairperson in liaisons with other relevant European bodies and initiatives; (5) support the Chairperson in preparations for reporting to the AG.
• Members appointed by the AG Chairperson
  Members shall (1) represent expertise on CA related principles and processes; (2) have good knowledge of the T2S URD and market standards on CA, (3) preferably participate also in other relevant European bodies and initiatives.

Participants in the Sub-group shall provide adequate resources anticipated for achieving progress within a short time period. Participation to the Sub-group is on a strictly personal basis. Should a member be unable to attend a meeting, he/she will in general not be able to designate an alternate. Exemptions to this rule can only be granted by the AG Chairperson. In addition, regular attendance is a pre-requisite for membership in the Sub-group and membership will cease should a member be absent for a total of more than two meetings.

When a member leaves the entity he/she represents, his/her membership will cease with immediate effect and his/her entity may propose a substitute member to the AG Chairperson.

Working procedures

Meetings
The Sub-group should meet (or hold a teleconference) as regularly as required for fulfilling its mandate. The exact frequency, form and participation of the meetings is ultimately a decision of the Chairperson of the Sub-group. When considered feasible, written procedures may be applied.

Interactions with other initiatives and forums
The Sub-group should co-operate with industry initiatives currently ongoing in the CA area and use their work as starting point in its analysis: notably, (1) the CAJWG coordinated by ESSF, and (2) agreements reached by CSDs in different countries (e.g. Euroclear Group).

Mini-consultations
In order to monitor the CASG standards implementation, the Group may need to issue surveys or questionnaires and involve the T2S National User Groups (NUGs) in conducting them.
Since the CESAME2 sponsored CAJWG has already initiated a similar exercise with Market Implementation Groups (MIGs) on the wider CA standards, these Groups of national experts should also be engaged in the CASG monitoring exercise.

Transparency
All documents that are discussed by the sub-group are posted on the ECB website to ensure full transparency. In exceptional cases, the Chairperson may decide not to post individual documents on the ECB website if she/he considers such documents to be of confidential nature.

Mini-consultation

Mini-consultation: Corporate Actions transaction management processing in the context of T2S (Deadline: 25 May 2009)