Clearing, Settlement and Custody

RepoClear – continued

payment netting, 166–7

PPS (Protected Payment System),

167

settlement netting, 166

Resource considerations, 174–5

Rights issues, shares, 61–2, 146–7

Risk:

BIS guideline limits, 124

derivatives, 84

OTC products, 123–4

risk-based margining, 93

Same day funds, 38

Scanning risk, derivative margins,

88, 89

Screen-based trading, 78

Scrip dividends, 62–3, 148

shares, 62–3

Securities, see Bonds; Shares

Segregation (individual designation),

139–40

Settlement:

actual settlement date accounting

(ASDA), 131–2

by global custodians, 128–32

and clearing, 1–18

continuous linked settlement

(CLS), 171–2

contractual settlement date

accounting (CSDA), 131–2

costs of, 17

definitions/explanations, 2, 11–12

dematerialized settlement, 11

objectives, 175–6

OTC products, 117–19

real-time gross settlement

(RTGS), 170

repayment settlement procedures,

47

RepoClear, 166

rolling versus fixed dates, 130

settlement times, 10–11, 130,

135–6

Treasury bills, 1–2

see also Bond settlement; CREST;

Share

Shares:

beneficial and legal ownership,

137

benefit distributions, 58, 144

bonus issues, 62

capital repayments, 61

capitalization, 62

cash benefits, 58–9

classes of, 55–6

company liquidations, 64

deferred shares, 56

designated shares, 56

dividend payments, 144

dividend payments and ex dates,

142

equity derivatives, 102

ex-date, 60–1

foreign registered shares, 56

immobilization and

dematerialization, 57

Initial Public Offering (IPO), 54

issuing and trading, 54

non-voting ‘A’ shares, 56

Offer for sale, 54

ordinary shares, 55

oversubscription, 54

ownership aspects, 53

pari passu lines of security, 64,

150–1

pay date, 60

preference shares, 55–6

proxy voting, 64–5, 152–4

record date, 59–60

redemption and maturity, 151

registered holders, 59

registrar duties/responsibilities,

59–60

repayment of capital, 146

rights issues, 61–2, 146–7

rights offered by, 53–4

scrip dividends, 62–3, 148

stock benefits, 61

stock situations, 63, 148

subscriptions (warrant), 63

Index234