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Analysis

Stratification Analysis Observations

Observations

Description

TBC

Best Practice

The working group determined a distinct list of 80 different CA types and grouped them into clusters by their effects on SFTs and their booking models: (see appendix - Table 1)

- Review groups of CAs which can be processed similarly

- Review CA clusters - Discuss impact of CAs in the cluster to the SFT- Conduct a survey amongst member firms for consensus.

Total in scope for reporting
(Click here to view)

Total out of scope for reporting
(Click here to view)

Totals
(Click here to view) (COAC-114 FOR ISLA REVIEW)

Information Only

Description

Best Practice

For example, Ordinary General Meetings & Maturity Extensions

Effects on SFTR reports:

- None of the Information Only cluster corporate actions, require changing an existing SFT booking or necessitate a new SFT booking.

- None of these CAs will require a new SFT booking, and therefore will not entail UTI generation etc.

- As the value of the security on loan may change, collateral will move to reflect the new value. This will be reported via the daily Collateral Update (COLU) report. (COAC-118 FOR ISLA REVIEW)

Economic outside of SFT

Description

TBC

Best Practice

For example, Cash Bonus & Interest payments.

Effects on SFTR reports:

- All of the events within this cluster of corporate actions, require a cash payment which does not affect theexisting SFT.

- None of these CAs will require a new SFT booking, and therefore will not entail UTI generation etc.- As the value of the security on loan may change, collateral will move to reflect the new value. This will be reported via the daily COLU report. (COAC-117 FOR ISLA REVIEW)

Full or Partial Return

Description

TBC

Best Practice

For example, Repurchase offer's & Final Maturity's

Effects on SFTR reports:
-All events that fall within the Full or Partial Returns cluster, require either:
i) Full closing out of an SFT to be reported via an ETRM (Termination / Early Term)
ii) Partial close out of an SFT to be reported via a MODI (Modification)

- None of the events in this cluster of CAs will necessitate a new SFT booking.

- Some of these CAs will require an exchange or reduction of the collateral, if the collateral security is the subject of the corporate action. These will be reported via the daily COLU report. (COAC-120 FOR ISLA REVIEW)

Additional Security on loan

Description

TBC

Best Practice

For example, Bonus Shares & Spin off's

Effects on SFTR reports:
-All events within this cluster require:
i) A new SFT to be booked, in addition to the existing trade, which is reported under a NEWT template.
ii) Some of these CAs may trigger a resulting value change of the SFT - these will be reported via the daily COLU report. (COAC-128 FOR ISLA REVIEW)

Return and New Trade

Description

TBC

Best Practice

For example, Stock Splits & Conversions

Effects on SFTR reports:
-All events within this cluster require either:
i) Full closing out of an SFT to be reported via an ETRM (Termination / Early Term)
ii) Partial close out of an SFT to be reported via a MODI (Modification)
iii) A new SFT to be booked in addition to the existing trade, which is reported under a NEWT template
iv) Some of these CAs may trigger a resulting value change of the SFT - these will be reported via the daily COLU report. (COAC-119 FOR ISLA REVIEW)

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