January 2012 International Securities Operational Market Practice Book New issues • New issuance draft and final documentation • Distribution processing Corporate actions • Corporate action event notifications • Corporate action processing Income • Income event notifications • Payment processing MARKET PRACTICE BOOK 2 MARKET PRACTICE BOOK Updates The MPB may be subject to a yearly review further to consultation with the International Securities Market Advisory Group. The main updates of this January 2012 version compared to February 2011 are: • Chapter 1 / section 1.2.: ISMAG Best Practices Summary #3. on Naming Convention - Updated • Chapter 3 / section 3.3.6.1.: Corporate Actions / Reg S - 144A transfers, flow “c” in table - Corrected • Annex 1: Letters of Representation June 2011 versions - Updated • Annex 6C: - General Meeting, Extraordinary Meeting, Repurchase/ Tender Offer, Exchange Offer, Consent checklists - Updated - Disclosure checklist - NEW 3 MARKET PRACTICE BOOK 4 MARKETMARKET PRACTICEPRACTICE BOOKBOOK Table of contents INTRODUCTION ........................................................................................................................................................9 LEGAL DISCLAIMER .................................................................................................................................................10 TIMING CONVENTION ..............................................................................................................................................10 GLOSSARY ......................................................................................................................................................11 CHAPTER 1: MARKET FRAMEWORK & ISMAG BEST PRACTICES SUMMARY .....................................................17 1.1. MARKET FRAMEWORK ..........................................................................................................................................17 1.1.1. ISMAG Adherence ..........................................................................................................................................17 1.1.2. ISMAG Adherent securities compliance monitoring ........................................................................................18 1.2. ISMAG BEST PRACTICES SUMMARY ...................................................................................................................19 1.3. INFORMATION TAXONOMY .....................................................................................................................................22 1.3.1. Generic recommendations ...............................................................................................................................22 1.3.2. Specific recommendations ...............................................................................................................................23 CHAPTER 2: NEW ISSUES .............................................................................................................................................27 2.1. SCOPE ......................................................................................................................................................27 2.2. INFORMATION FLOW ...............................................................................................................................................27 2.2.1. New issues documentation description ............................................................................................................27 2.2.1.1. Draft documentation ..................................................................................................................................27 2.2.1.2. Final documentation ..................................................................................................................................28 2.2.1.3. Updated documentation after closing date................................................................................................29 2.2.2. New issues draft documentation flows .............................................................................................................30 2.2.2.1. Documentation flow for Stand-Alone securities codes allocation & eligibility ...........................................30 2.2.2.2. Documentation flow for new Programme set up and subsequent issuance under Programme codes allocation & eligibility ..................................................................................................32 2.2.2.2.1. Documentation flow for Programmes at establishment ....................................................................32 2.2.2.2.2. Documentation flow for issuance under Programme at acceptance ................................................34 2.2.3. New issues final documentation flows ..............................................................................................................36 2.2.3.1. Documentation flow for Stand-Alone securities at issuance .....................................................................36 2.2.3.2. Documentation flow for Stand-Alone securities when updates/changes occur after closing date .......................................................................................................................................37 2.2.3.3. Documentation flow for issuance under Programme ................................................................................38 2.2.3.3.1. Documentation flow for Programmes at establishment ....................................................................38 2.2.3.3.2. Documentation flow for Programmes when updates/ changes occur after establishment ...........................................................................................................................38 2.2.3.3.3. Documentation flow for issuance under Programme at issuance ....................................................39 2.2.3.3.4. Documentation flow for issuance under Programme when updates/changes occur after closing date ........................................................................................40 2.3. PROCESSING ......................................................................................................................................................40 2.3.1. New issues same day syndicated distribution ..................................................................................................40 2.3.2. Same day syndicated distribution flow .............................................................................................................41 CHAPTER 3: CORPORATE ACTIONS ...........................................................................................................................43 3.1. SCOPE ......................................................................................................................................................43 3.2. INFORMATION PROVISION FLOW ..........................................................................................................................44 3.2.1. Corporate action information ............................................................................................................................44 3.2.1.1. Information description ..............................................................................................................................44 3.2.1.2. Preliminary information ..............................................................................................................................44 3.2.1.3. Complete information ................................................................................................................................45 3.2.2. Information provision and timing per event types .............................................................................................47 3.2.2.1. Information flow for Predictable events other than those occurring upon a triggering event or at the option of the Issuer ...........................................................................................47 5 MARKET PRACTICE BOOK 3.2.2.2. Information flow for Predictable events occurring upon a triggering event or at the option of the Issuer .............................................................................................................................48 3.2.2.3. Information flow for Unpredictable events .................................................................................................49 3.2.2.3.1. Pre event launch ...............................................................................................................................49 3.2.2.3.2. Event launch or post launch .............................................................................................................51 3.3. PROCESSING ......................................................................................................................................................50 3.3.1. Processing overview ........................................................................................................................................52 3.3.2. Instructions from holders .................................................................................................................................52 3.3.2.1 Instruction Deadlines .................................................................................................................................53 3.3.2.2. Instruction Withdrawal or Cancellation .....................................................................................................54