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CDP Clearing Rules

Regulatory Notice 6.5—Compensation for corporate action entitlements
1. Rule 6.5.4 provides that, subject to Rule 6.5.5,
(a) a Clearing Member that is due to, but does not, deliver securities in respect of Novated Contracts is liable to compensate CDP for corporate action entitlements that accrue on those securities and that a recipient of those securities would have been entitled to receive but for the delivery failure; and
(b) a Clearing Member that is due to, but does not receive securities in respect of Novated Contracts is entitled to be compensated by CDP for corporate action entitlements that accrue on those securities and that a recipient of those securities would have been entitled to receive but for the delivery failure.
2. Rule 6.5.5 states that Rule 6.5.4 applies only to such types of corporate action entitlements that CDP shall from time to time notify.
3. Rule 6.5.6 states that any compensation under Rule 6.5.4 shall be made in such form and value, and be due by such time, as CDP shall specify. Where CDP requires any action by a Clearing Member to effect such compensation, the Clearing Member shall do so, and shall obtain all necessary authorisation from its Customer to enable it to do so, by such time as CDP shall specify.
4. Appendix A to this Regulatory Notice sets out:
(a) the types of corporate action entitlements to which Rule 6.5.4 applies. CDP may additionally prescribe, as it shall from time to time notify, further types of corporate action entitlements to which Rule 6.5.4 applies; and
(b) the form and value of the compensation to be made, the date on which such compensation is due to be made between the Clearing Member and CDP, and the action required by a Clearing Member to effect such compensation. CDP may replace, vary, supplement or additionally specify, as it shall from time to time notify, the form or value of any compensation to be made under Rule 6.5.4, the due date of such compensation, and the action required by Clearing Member to effect such compensation.

Added on 10 December 201810 December 2018.

Appendix A to Regulatory Notice 6.5
No. Corporate Action Action required of
Clearing Member to
effect compensation 		Form and value of
compensation 		Due date of
compensation
1. Cash dividend None Cash in the currency and
amount that the buying
Customer would have received
but for the failed delivery 		Dividend
payment date
2. Renounceable
entitlement (e.g.,
bonus issue /
renounceable rights
issue/ dividend in
specie) in security
that is custodised
with CDP 		None The security in the quantity
that the buying Customer
would have received but for
the failed delivery 		Credit date of the
entitlement
3. (a) Non-
renounceable
entitlement (e.g.,
non-renounceable
rights issue) in
security that is
custodised with CDP

(b) Renounceable or
non-renounceable
entitlement in
security that is not
custodised with CDP 		None Cash in a currency and in such
amount as determined by CDP
based on the closing price of
the underlying security as of
the closing day of the
entitlement exercise period
minus the subscription price of
the entitlement 		One Market Day
after CDP
determines the
compensation
amount.
4. Conversion None The security into which the
conversion has been made and
in the quantity that the buying
Customer would have received
but for the failed delivery 		Effective date of
conversion, i.e.
one Market Day
after book
closure date
(BCD+1)
5. Bond redemption Clearing Members to
submit settlement
instructions for the
offsetting trades for
settlement with their
Customers one Market
Day after bond maturity 		Cash in a currency and in such
amount as determined by CDP
based on the cash-settlement
methodology described in
paragraph 4 of Appendix 2—
Determination of Cash
Settlement Amount. 		Two Market Days
after bond
maturity date
6. Scrip / cash election
dividend 		Buying Clearing
Member shall obtain its
Customer's election
instruction and submit
the same to CDP one
Market Day before
election closure date
(ECD-1).

Selling Clearing
Member shall inform its
Customer of the
elected form of
compensation upon
being notified by CDP
of the assignment of
elections. 		(a) Scrip dividend elected: The
security, in the quantity that
the buying Customer would
have received but for the failed
delivery.

(b) Cash dividend elected: Cash
in the currency and amount
that the buying Customer
would have received but for
the failed delivery. 		Dividend
payment date
7. Currency election
dividend 		Buying Clearing
Member shall obtain its
Customer's election
instruction and submit
the same to CDP one
Market Day before
election closure date
(ECD-1).

Selling Clearing
Member shall inform its
Customer of the
elected form of
compensation upon
being notified by CDP
of the assignment of
elections. 		Cash in the currency elected
and in the amount that the
buying Customer would have
received but for the failed
delivery 		Dividend
payment date
8. Partial Offer Buying Clearing
Member shall obtain its
Customer's election
instruction (as to
whether to accept the
offer) and submit the
same to CDP one
Market Day before
election closure date
(ECD-1). 		(a) If the offer consideration is
in the form of cash: Cash in the
currency and in the amount
that the buying Customer
would have received but for
the failed delivery

(b) If the offer consideration is
in the form of a securities
listed on SGX-ST: The security
in the quantity that the buying
Customer would have received
but for the failed delivery.

(c) If the offer consideration is
in the form of a security that is
non-transferable or not listed
on SGX-ST: Cash in a currency
as determined by CDP and in
the amount that CDP
determines is a fair
representation of the market
value of the security that the
buying Customer would have
received but for the failed
delivery. 		Payment date of
the partial offer
9. Takeover Offer Buying Clearing
Member shall obtain its
Customer's instruction
(as to whether to
accept the offer) and
submit the same to CDP
within 3 Market Days
from election closure
date (by ECD+3). 		(a) If the offer consideration is
in the form of cash: Cash in the
currency and in the amount
that the buying Customer
would have received but for
the failed delivery.

(b) If the offer consideration is
in the form of a security listed
on SGX-ST: The security in the
quantity that the buying
Customer would have received
but for the failed delivery.

(c) If the offer consideration is
in the form of a security that is
non-transferable or not listed
on SGX-ST: Cash in a currency
as determined by CDP and in
the amount that CDP
determines is a fair
representation of the market
value of the security that the
buying Customer would have
received but for the failed
delivery. 		6 Market Days
from election
closure date
(ECD+6)

Added on 10 December 201810 December 2018.