Nasdaq Clearing would like to inform you that as of 3rd of September, 2020 changes will be made to the treatment of corporate action payments in relation to margin collateral at Nasdaq Clearing. Nasdaq Clearing collects corporate action payments in respect of securities held as collateral on the Members' Collateral Custody Accounts. Currently, all corporate action payments (whether income, capital or dividend) and distributions in respect of such securities are directly paid out to the Members' designated bank accounts. Starting from 3rd September, 2020 corporate action cash received on securities placed as collateral for margin requirements will not be paid out directly. Instead, these cash amounts will be reflected on the Members' Collateral Custody Accounts as part of the cash collateral balance. Following a corporate action payment, such cash amount (A) will form part of the collateral balance on the Custody Account; (B) may be used to meet any margin or cash requirements (in accordance with the cash optimization procedure and the clearing rules); and (C) following the application of (B), any excess collateral will be automatically paid out to the Member's designated bank account. These changes have been reflected in the updated version the General Terms for Collateral Custody Accounts in force from 3rd September, 2020. Please note that the treatment of corporate action payments received on securities contributed to the default fund(s) and, where relevant, the loss sharing pool (as governed by the General Terms for Default Fund Custody Account and General Terms for Loss Sharing Custody Account) will not be subject to change at this time and will continue to be directly paid out to the Members' designated bank accounts as per the current practices. For further information, please contact Nasdaq Clearing: Telephone +46 8 405 68 80 or clearing@nasdaq.com
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