Clearing, Settlement and Custody

result with the global custodian, if at fault, making good the client’s

position. This may involve financial loss.

Capitalization

A company can recapitalize or restructure its capital. Among the

alternatives, this may be to reduce the number of shares in issue or to

reduce the price of the shares. To achieve the latter a capitalization

event, more often called a bonus or scrip issue, takes place. This is the

free issue of shares to existing shareholders in proportion to the

shareholders’ balances as at record date.

In this case, the client does not need to give any instructions.

However, the global custodian should inform them of the issue as the

number ...