Annex 25 to the GTC of OeKB CSD

Using T2S for

Transaction
Management
Guidelines for the Austrian Capital Market.

Version 1.10 / 23 November 2020 / Public

Table of Contents
1 Introduction 6
1.1 Objective of the Guidelines "Using T2S for Transaction Management" 6
1.2 Scope and Structure of the Document 6
2 Overview of Using T2S for Transaction Management 7
2.1 Corporate Actions on flow 7
2.2 Terminology Definitions 8
2.2.1 Notable Reference Dates 8
2.2.2 Effecting Transaction Management 8
3 Market claims 9
3.1 Definitions 9
3.2 Transactions Concerned 9
3.2.1 Transaction Types 9
3.2.2 Special Transaction Indicators 10
3.2.3 Dealing with Fractions Resulting from Market Claims 10
3.3 Claims-relevant Events 11
3.4 Identification of Market Claims 12
3.4.1 Market Claims for Securities Quoted per Unit 13
3.4.2 Market Claims for Securities Quoted in Nominal Value 14
3.5 Market Claims Case Models (Unit Quotation) 14
3.5.1 Market Claim: Trade Date Before Ex Date / Settlement after Record Date 15
3.5.2 Reverse Claim: Trade Date On/After Ex Date - Settlement Before/On Record
Date 16
3.6 Market Claims Workflow 17
3.6.1 Total Workflow Overview 17
3.6.2 Market Claims Generation 17
3.6.3 Monitoring Market Claim Transactions 18
3.6.3.1 Details About the Corporate Action and Market Claims Process 18
3.6.3.2 CSD Hold 18
3.6.3.3 Party Hold 18
3.6.4 Market Claims Settlement 19
3.6.5 Market Claims by CCP.A 19
3.6.6 Market Claims by Commercial Banks 20
3.7 SWIFT Messages Related to Market Claims 20
3.7.1 MT548 Settlement Status and Processing Advice 20
3.7.1.1 Message Format 20
3.7.1.2 SWIFT Fields in the Event of a Market Claim 20
3.7.2 MT544-547 Settlement Confirmations 22
3.7.2.1 Message Format 22
3.7.2.2 SWIFT Fields in the Event of a Market Claim 22

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 3.7.3 MT 566 Corporate Action Confirmations 23
3.7.3.1 In the case of corporate actions, PFD (compensation for cash) or
FOP instructions (compensation for securities) will be generated.
Depending on the progress of the migration to the new IT-platform
for the processing of corporate actions, a MT566 will also be sent.
Message Format 23
3.7.3.2 SWIFT Fields in the Event of a Market Claim 23
4 Transformations 26
4.1 Definitions 26
4.2 Transactions Concerned 27
4.2.1 Transaction Types 27
4.2.2 Special Transaction Indicators 28
4.2.3 Dealing with Fractions Resulting from Transformations 28
4.3 Transformation-relevant Events 28
4.4 Identification of Transformations 30
4.5 Transformations Case Models 30
4.5.1 Differentiation Between Mandatory Reorganisations with/without Options 30
4.5.1.1 Transformations for Mandatory Reorganisations Without Options 30
4.5.1.2 Transformations for Mandatory Reorganisations With Options 31
4.5.2 Transformations Use Cases 31
4.5.2.1 Case Model 1 – Final Maturity 31
4.5.2.2 Case Model 2 – Reorganisation/Conversion into Multiple ISINs 31
4.5.2.3 Case Model 3 – Reorganisation without Settlement of Fractions in
Cash 32
4.5.2.4 Case Model 4 – Reorganisation with Settlement of Fractions in Cash 32
4.6 Transformations Workflow 33
4.6.1 Total Workflow Overview 33
4.6.2 Determining Transformation-relevant Settlement Transactions 33
4.6.3 Transformation - Cancellation 33
4.6.4 Transformation Generation 34
4.6.5 Transformations by CCP.A 35
4.7 SWIFT Messages Related to Transformations 35
4.7.1 MT548 – Status Message for the Cancellation of the Underlying Instruction 35
4.7.1.1 Message Format 35
4.7.1.2 SWIFT Fields in the Event of a Cancellation of the Underlying
Instruction 35
4.7.2 MT548 – Status Message for a Transformation 36
4.7.2.1 Message Format 36
4.7.2.2 SWIFT Fields in the Event of a Transformation 36
4.7.3 MT544-547 Settlement Confirmation 38
4.7.3.1 Message Format 38
4.7.3.2 SWIFT Fields in the Event of a Transformation 38
5 Special scenarios regarding the generation of claims and transformations 40
5.1 Claims/transformations for instructions of the transaction type External (custodian of
OeKB CSD does not use T2S) 40

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 5.2 Claims/transformations for instructions of the transaction type Cross with the
custodian Euroclear France 40
5.3 Claims/transformations in Non-EUR (not converted in EUR) 40
5.4 Claims/transformations in Non-EUR (converted in EUR) 40
5.5 Overview regarding the generation of Claims und Transformations 41
6 Buyer Protection 42
6.1 Definitions 42
6.2 Buyer Protection OeKB CSD 42
6.3 Buyer Protection CCP.A 43
7 Glossary 44

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Table of Figures
Figure 1: Categorisation of Market Claims, Transformations and Buyer Protection ........................................................... 7

Figure 2: Market Claims Process Timeline ........................................................................................................................ 12

Figure 3: Market Claims - From the Seller to the Buyer .................................................................................................... 15

Figure 4: Reverse Claim – From the Buyer to the Seller ................................................................................................... 16

Figure 5: Overview of the Complete Market Claims Workflow – Example: Dividend Payment ......................................... 17

Figure 6: Transformations Process Timeline ..................................................................................................................... 26

Figure 7: Transformations for Mandatory Reorganisations Without Options .................................................................... 30

Figure 8: Transformations for Mandatory Reorganisations With Options ......................................................................... 31

Figure 9: Total Transformations Workflow Overview ......................................................................................................... 33

Figure 10: Buyer Protection Timeline ................................................................................................................................ 42

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1 Introduction

1.1 Objective of the Guidelines "Using T2S for Transaction Management"

This document describes transaction management in the Austrian capital market using T2S.

Starting with the migration to T2S, the corresponding required standards must be applied in the Austrian market. They
can be found following the link
http://www.ecb.europa.eu/paym/t2s/governance/ag/html/subcorpact/index.en.html.

1.2 Scope and Structure of the Document

The guidelines "Using T2S for Transaction Management in the Austrian Capital Market" describes the processes and
market practices for the settlement of market claims and transformations as well as the buyer protection as they have
been identified by the Austrian CANIG and CASG within the framework of activities of national Corporate Action
Working Groups.

Starting with general information in chapter 2 about transaction management as regards Corporate Actions on flow this
document defines the terminology identified for market claims, transformations and buyer protection.

Then, chapter 3 – Market Claims, chapter 4 – Transformations and chapter 5 – Buyer Protection specify the
prerequisites for the individual types of transaction management, their scope and the structure of their associated
processes. An analysis presents the SWIFT Corporate Action Event Types (CAEV Qualifiers) that are relevant for the
Austrian capital market as regards market claims, transformations and buyer protection. Additionally, examples outline
the generation and implementation of transaction management processes.

The transactions via OeKB CSD and the CCP.A described here will consider market claims, transformations and buyer
protection separately.

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2 Overview of Using T2S for Transaction Management

2.1 Corporate Actions on flow

Transaction Management (TM) comprises all processes implemented if the CSD finds that not all entitled transactions
related to a corporate action event have been properly settled by the record date end-of-date (EOD).

To carry out TM (Corporate Actions on flow) it is necessary to determine the contractually entitled participants from the
pending transactions (settlement instructions with status „matched“), calculate their entitlements resulting from a
corporate event such as an income event or a corporate action, implement claims if necessary, correct, re-calculate
and book them.

Different types of transaction management apply to individual events for Corporate Actions on flow: Corporate actions
are categorised into distributions and reorganisations. Distributions include cash and/or securities income, such as
dividends, interest payments, distributions from funds, capital distributions and subscription rights bookings.
Reorganisations include all corporate actions, mandatory ones with/without option as well as voluntary ones.

Market claims are generated whenever distribution events (without option) occur. In the event of mandatory
reorganisations transformations govern the compensations from entitlements resulting from pending transactions.
Corporate actions where the investor is offered a choice of option enable buyer protection.

Corporate Action

Distribution Reorganisation

Without Option With Option Mandatory Optional

With Option Without Option

Market Claim
Transformation

Buyer Protection

Figure 1: Categorisation of Market Claims, Transformations and Buyer Protection

The generation of Market Claims and Transformations in conjunction with „Distributions with Options“ and
„Reorganisations with Options“ (CHOS events e.g. such as Choice Dividends in Cash or Shares) is supported for the
transaction types „Intra“ und „Cross“ if the T2S Corporate Action Standards are met. This means e.g. for Choice
Dividends in Cash or Shares a processing via „Intermediate Securities“ with an official ISIN (issuance of dividend rights
under a separate ISIN in the course of the mandatory RHDI-event). In this case („2-Event-Scenario“) Market Claims, as
the case may be, are generated in the context of Transaction Management because of the 1. event (Mandatory

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Distribution – RHDI). For CHOS events without the issuance of„Intermediate Securities“ neither Market Claims nor
Transformations are generated.

2.2 Terminology Definitions

2.2.1 Notable Reference Dates

Terms SWIFT Description

Ex Date XDTE The ex date is the first day on which a financial instrument no longer certifies the
entitlement to participate in a particular event (starting a 0:00 o'clock).
Payment Date PAYD The payment date is the day on which the CSD carries out the bookings related to
an income or a corporate action on the securities accounts of the entitled holders
if the related cash and/or securities were delivered in time.
Record Date RDTE The record date is the day at the end of which the CSD determines the entitled
securities positions. For distributions in cash or securities there must be allowed a
period of time between ex date and record date which equals the settlement
period of the Vienna Stock Exchange minus one day.

Trade Date TRAD The trade date is the day on which, in the case of stock exchange and OTC
transactions, the rights of ownership to financial instruments are transferred from
the seller to the buyer.
Intended SETT The intended settlement date is the day on which the instructing parties intend to
Settlement Date settle the settlement transaction.
Effective ESET The effective settlement date is the day on which the settlement transaction was
Settlement Date actually settled.

2.2.2 Effecting Transaction Management

According to T2S standards the Instruction Owner CSD is responsible for processing market claims and
transformations. Buyer protection processes are settled between the commercial banks. If a CSD is not involved as the
IOC and there are market claims or transformations settlement transactions sent, it will merely forward the scope of
the market claims and transformation instructions of the original instructing CSD (Instruction Owner CSD).

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3 Market claims

3.1 Definitions

Market Claim as defined by the T2S CA Standards

“… is a process to reallocate the proceeds of a distribution to the contractually entitled party. The T2S CA standards,
being standards on flows, focus on the scenario where the contractually entitled party has not received the underlying
securities (there is a pending underlying transaction) at close of business on Record Date.”

“However, and in line with the market standards for CAs, the T2S standards also cover the scenario where the buyer
creates the market claim to the seller, when trade date is on or after Ex Date and Actual Settlement Date is on or before
Record Date (i.e. there is no pending transaction). In some markets this case is referred to as “reverse market claim.”

That is, market claim („claim“) means the process of re-allocation of income from a distribution with the aim to provide
the actually entitled holders with the amount of cash/quantity of units they are entitled to.

3.2 Transactions Concerned

By definition, T2S transaction management involving distribution events must consider all pending settlement
transactions with settlement status "matched" on the record date EOD and those due to be matched within 20 T2S
Opening Days (days of operation) after the record date. Market claims shall be generated for such open settlement
instructions with event-related entitlements.

Settlement instructions with status "unmatched" are not considered.

Claims on income payments (e.g. dividends) of US securities for instructions of transaction type „Intra“ are not
processed and have to be handled directly by the parties of the transaction.

With regard to trades in US securities concluded at the Vienna Stock Exchange a disclosure for the bilateral
compensation between the two trading parties by CCP.A is necessary and can be requested at office@ccpa.at.

Claims for instructions of transaction types „External“ and „Cross“ (processing through a custodian of OeKB CSD) are
being processed.

3.2.1 Transaction Types

Intra CSD

Both counterparties are securities account holders with OeKB CSD. In this case the OeKB CSD will apply the
compensation and adjustment procedure described in the present guidelines to the instructions of both counterparties.

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Cross CSD

One counterparty is securities account holder with OeKB CSD. The second counterparty holds a securities account with
another CSD which is a T2S participant. In this case the OeKB CSD will apply the compensation and adjustment
procedure described in the present guidelines to the instruction of the party holding a securities account with OeKB
CSD. OeKB CSD is the Instruction Owner CSD (IOC) for this instruction. Compensations and adjustments of the
instruction of the counterparty holding the securities accounts with the other CSD will be performed by the other CSD.

External

One counterparty is securities account holder with OeKB CSD. The second counterparty holds a securities account with
another CSD which is no T2S participant and which is safekeeping the security to be settled. In this case the
compensation and adjustment will be performed according to the standards of the respective CSD. This type of
regulation process is not covered by the present guidelines.

3.2.2 Special Transaction Indicators

Opt-out Indicator

The two counterparties in a transaction can use an opt-out indicator to prevent the generation of a market claim. The
opt-out indicator is an additional matching criterion.

Cum/Ex Indicator

The two settlement parties can use the cum/ex indicator to identify a trade as "ex" or "cum" independently of the trade
date. The cum/ex indicator is an additional matching criterion.

Usage in the Austrian Capital market:

The Opt-out- as well as the Cum-/Ex-Indicator can be used for Underlying Settlement Instructions and will be taken into
consideration for Matching. The Indicators are not taken into account for the Market Claims detection. This applies to
all types of transactions (Intra CSD, Cross CSD und External).

For the transaction type Cross CSD this can in rare cases result in Market Claims generated by OeKB CSD where the
other instruction owning CSD does generate a Market Claim or vice versa. The generation or cancellation of claims in
such cases rests with the account holder of OeKB CSD.

3.2.3 Dealing with Fractions Resulting from Market Claims

If the calculated quantity of units from a market claim results in a decimal number, the resulting fractions are either
compensated for in cash or not, as announced by the issuer.

If an issuer in the Austrian capital market does not grant a compensation in cash and there are fractions, the market
claim instruction to be generated by the instruction owner CSD shall show the quantity of units commercially rounded
to a maximum of three places after the decimal comma. In the case of securities quoted in nominal value the amount
shall be commercially rounded to a maximum of two places after the decimal comma. In their role as instruction owner
CSD, the OeKB CSD shall generate the market claim instruction as a Delivery Free of Payment (DFP).

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If the issuer compensates for any fractions in cash, he announces a reference price for compensations. The instruction
owner CSD shall generate a market claim instruction (instruction for units without places after the decimal comma) as
a Delivery Free of Payment (DFP). In addition to the unit instruction another transaction shall be generated as a
Payment Free of Delivery (PFD), where the cash amount equals the product of the compensation price and the places
after the decimal comma (fractions).

3.3 Claims-relevant Events

The following corporate action events can be involved in the market claims process in the Austrian capital market.

CAEV Designation Used in Description

SWIFT User Handbook
BONU Bonus Issue Bonus, scrip or capitalisation issue. Security holders receive additional assets
(MAND) Capitalisation Issue free of payment from the issuer, in proportion to their holding.
CAPD Capital Distribution The corporate event pays shareholders an amount in cash issued from the
(MAND) Capital account. There is no reduction to the face value of a single share (or the
share has no par value). The number of circulating shares remains unchanged.
CAPG Capital Gains Distribution of profits resulting from the sale of company assets, for example,
(MAND) Distribution Shareholders of Mutual Funds, Unit Trusts, or Sicavs are recipients of capital
gains distributions which are often reinvested in additional shares of the fund.
DECR Decrease in Value Reduction of face value of a single share or the value of fund assets. The
(MAND number of circulating shares/units remains unchanged. This event may include
a cash pay-out to holders.
DRAW Drawing Redemption in part before the scheduled final maturity date of a security.
(MAND) Drawing is distinct from partial call since drawn bonds are chosen by lottery and
with no reduction in nominal value.
DRCA Cash Distribution From Distribution to shareholders of cash resulting from the selling of non-eligible
(MAND) Non-Eligible Securities securities, for example, in the frame of a depositary receipt program.
Sales
DVCA Cash Dividend Distribution of cash to shareholders, in proportion to their equity holding.
(MAND) Ordinary dividends are recurring and regular. Shareholder must take cash and
may be offered a choice of currency.
DVSC Scrip Dividend/Payment Dividend or interest paid in the form of scrip.
(MAND)

DVSE Stock Dividend Dividend paid to shareholders in the form of equities of the issuing corporation.
(MAND)

INTR Interest Payment Interest payment distributed to holders of an interest bearing asset.

LIQU Liquidation A distribution of cash, assets, or both. Debt may be paid in order of priority
(MAND) based on preferred claims to assets specified by the security.
PINK Payment in kind Interest payment, in any kind except cash, distributed to holders of an interest
(MAND) bearing asset.
PRED Partial Redemption Securities are redeemed in part before their scheduled final maturity date
Without Reduction of without reduction of the nominal value of the securities. This is commonly done
Nominal Value by pool factor reduction.

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CAEV Designation Used in Description
SWIFT User Handbook
RHDI Intermediate Securities The distribution of intermediate securities that gives the holder the right to take
(MAND) Distribution part in a future event.
SHPR Shares Premium This corporate event pays shareholders an amount in cash issued from the
(MAND) Dividend shares premium reserve. It is similar to a dividend but with different tax
implications.
SOFF Spin-Off A distribution of subsidiary stock to the shareholders of the parent company
(MAND) without a surrender of shares. Spin-off represents a form of divestiture resulting
in an independent company. E.g. demerger, distribution, unbundling.

3.4 Identification of Market Claims

According to T2S Standards the process of determining market claims starts on the record date EOD and continues for
20 T2S Opening Days (days of operation) from record date.

Market Claims Process

EOD
Announcement
Ex-Date Record Date Payment Date
by the Issuer

Min. 2 T2S Opening Days Settlement Period Pref. 1 T2S Opening Day
(days of operation) – 1 T2S Opening Day (day (day of operation)
of operation)

20 T2S Opening Days

(days of operation)

Figure 2: Market Claims Process Timeline

Market claims processing differentiates between securities quoted per unit and those quoted in nominal value as
regards the reference dates relevant for corporate actions on flow as well as the workflow.

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3.4.1 Market Claims for Securities Quoted per Unit

From the Seller to the Buyer

Income paid out to the seller must be transferred to the buyer if:

▪ The status of the pending settlement transaction on record date EOD is

▪ Matched: A market claim must be generated for the complete quantity not yet delivered
▪ Partially settled: A market claim must be generated for the quantity still open, i.e. not yet delivered, previously
already set to status "matched"
This also applies to transactions that are to be matched up to 20 T2S Opening Days (days of operation) after the
record date.
▪ The trade date lies before the ex date of a corporate action:
TRAD < XDTE
▪ The transaction has not yet been settled on the record date EOD.
The effective settlement date therefore lies after the record date:
ESET > RDTE

From the Buyer to the Seller (Reverse Claim)

Income already paid out to the buyer must be transferred back to the seller if:

▪ The trade date lies on or after the ex date of a corporate action:

TRAD >= XDTE
▪ The securities and cash settlement is completed before or on the record date:
ESET <= RDTE

Corporate Action Events without Record Date:

If there is no record date associated with a corporate action event the ex-date rule shall apply. This may be the case in
the Austrian market for distributions from fund shares in particular.
In these cases the ex date is used as the reference date instead of the record date: all other criteria, such as the status
of the settlement transactions and the observation period of 20 T2S Opening Days (days of operation) after the
reference date remain unchanged.
▪ The status of the settlement transactions will be calculated on the ex date – 1 EOD.
▪ The entitled positions and trades are determined based on the ex date –1

From the Seller to the Buyer (Market Claim):

The trade date lies before the ex date of a corporate action:

TRAD < XDTE
The effective settlement date lies on or after the record date:
ESET >= XDTE

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The direction „From the Buyer to the Seller” (Reverse Claims) is usually not encountered in actual trade situations
where the ex-date rule applies.

3.4.2 Market Claims for Securities Quoted in Nominal Value

As a rule and in contrast to securities quoted by unit, securities quoted in nominal value use the Intended Settlement
Date as criterion instead of the ex date.

From the Seller to the Buyer

Income paid out to the seller must be transferred to the buyer if:

▪ The status of the pending settlement transaction on record date EOD is

▪ Matched: A market claim must be generated for the complete quantity not yet delivered
▪ Partially settled: A market claim must be generated for the quantity still open, i.e. not yet delivered, previously
already set to status "matched"
This also applies to transactions that are to be matched up to 20 T2S Opening Days (days of operation) after the
record date.
▪ The intended settlement date for interest payments lies before the record date:
SETT <= RDTE
▪ The securities and cash settlement has not yet been completed on the record date EOD.
The effective settlement date lies after the record date:
ESET > RDTE

3.5 Market Claims Case Models (Unit Quotation)

Depending on when the trade was made (trade date) and when settlement is effected (effective settlement date) the
resulting constellations as regards the corporate action event dates such as ex date, record date and payment date are
as follows.

Case Trade Date Effective Settlement Date Market Claims Direction

Market Claim < Ex Date > Record Date From the Seller to the Buyer

Reverse Claim >= Ex Date <= Record Date From the Buyer to the Seller

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3.5.1 Market Claim: Trade Date Before Ex Date / Settlement after Record Date

Trade date before ex date

The settlement transaction is still pending on record date EOD.

The settlement transaction is settled after the record date EOD.

Market Claim: from the seller to the buyer.

Status „Matched“

EOD
Ex-Tag Record Date Payment Date

Effective
Trade Date Settlement Date

Settlement Instruktion

TRAD < XDTE

ESET > RDTE

Figure 3: Market Claims - From the Seller to the Buyer

On the record date EOD and the following 20 T2S Opening Days (days of operation) the instruction owner CSD
determines which settlement instructions are pending and generates the corresponding market claim instructions. The
transaction was made "cum dividend" on the trade date. In this case, pending entitlements must be transferred "from
the seller to the buyer".

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3.5.2 Reverse Claim: Trade Date On/After Ex Date - Settlement Before/On Record Date

Trade date on/after ex date

Settlement is effected before or on the record date.

Reverse Claim: from the Buyer to the Seller.

Ex-Tag Record Date Payment Date

Effective
Trade Date Settlement Date

Settlement Instruction

TRAD >= XDTE

ESET <= RDTE

Figure 4: Reverse Claim – From the Buyer to the Seller

The settlement instruction has already been settled before or on the record date (truncated settlement period). As a
result, the corresponding securities positions are in the buyer's securities account already on the record date EOD. The
entitlements "from the buyer to the seller" determined on the record date need to be corrected: The instruction owner
CSD generates reverse claims.

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3.6 Market Claims Workflow

3.6.1 Total Workflow Overview

CA Notification NEWM
1
OeKB CSD OeKB CSD (MT564)
Asset Settlement
CA Notification REPE
Servicing Services 2
(MT564)

Pending/settled
3 Instructions
Detection
Market Claim
Market Claim
4 Instruction PFD matched

Status PFD – Matched

5a Status messages 5b (sese.024)

6 Status PFD – Matched (MT548)

DCA 1
OeKB CSD
7 CA Confirmation (MT566) 1.000 Participant
Distribution
carried out 1.000
Release PFD
8 „CSD Hold“

DCA 2 9b
9a Status messages Status PFD (sese.024)
1.000

10 Status PFD (MT548)

11a Confirmation PFD 11b Confirmation PFD (sese.025)

12 Confirmation PFD (MT54x)

Confirmation Market Claim
13
(MT566) Settlement Services:
Asset Servicing: Communication between OeKB CSD Communication between OeKB CSD and customer
CA Notification/Confirmation ISO 15022/MT56X and T2S ISO 20022 ISO 15022/ISO 20022

Figure 5: Overview of the Complete Market Claims Workflow – Example: Dividend Payment

3.6.2 Market Claims Generation

Using the corporate action event master data communicated to the OeKB CSD participants (1) and (2) by OeKB CSD via
SWIFT MT564 as a basis, the "Market Claim Detection" processing identifies settled and pending settlement
instructions (3).

It is the instruction owner CSD who generates the market claims. They are PFD and/or FOP instructions, depending on
whether the related compensation or adjustment involves cash or units. As specified by the T2S CA Standards the
claims are not linked with the underlying instructions. Management of the claim instructions must be carried out by the
OeKB CSD participants themselves.

For special aspects as regards the generation of market claims for settlement transactions of the CCP.A please refer to
chapter 3.6.5 .

Because of the withholding tax applicable in the Austrian market it is never the gross dividend, but in all cases the
resulting net dividend after deduction of the withholding tax which is subject to market claims.

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Records are generated for all settlement transactions obtaining status "matched" on a certain day, based on the
pending settlement instructions with entitlements determined on the record date EOD (for details on the criteria please
refer to chapter 3.4.1 or 3.4.2). This means that the claims process includes settlement transactions with status
"matched" and those with status "partially settled" (portion of the partially settled quantity that is matched but not yet
settled). (4) Additionally—in the case of reverse claims—the process includes settlement transaction with status
„settled“ and „partially settled“ (portion of the partially settled quantity that is already settled).

At the end of day of each day following the record date for the duration of 20 T2S Opening Days (days of operation)
from record date) all settlement transactions with status "matched", "partially settled" and "settled" meeting the claims
detection criteria are also included in the market claims process. This means that settlement transactions which match
and/or settle up to 20 T2S Opening Days (days of operation) after the record date are considered. This also applies to
settlement transactions which match and settle on the same day.

The securities transaction type is set to CLAI (= Market Claim) for market claim transactions.

3.6.3 Monitoring Market Claim Transactions

3.6.3.1 Details About the Corporate Action and Market Claims Process

In the course of the EOD processing the OeKB CSD participants receive a SWIFT MT548 status message about the
generation of a market claim (6). This message contains the reference of the claim settlement instruction to T2S as well
as the reference of the underlying settlement instruction (MT540-543) and the corporate action reference (CORP).
Additional SWIFT MT548 messages may be sent to the OeKB CSD participants in the event of status changes.

The corporate actions are processed on the payment date independently of the market claims process and SWIFT
MT566 Corporate Actions Confirmations are sent to the OeKB CSD participants (7).

OeKB CSD receives data from T2S on an ongoing basis as regards the current status of claim instructions (accepted,
rejected, matched, etc.). It forwards the status messages to the OeKB CSD participants.

3.6.3.2 CSD Hold

As soon as the market claims instructions have been generated OeKB CSD puts them on status "CSD Hold". This
means that such instructions will not be settled for the time being. OeKB CSD releases these instructions after the
corporate action (cash and/or securities delivery) was settled (8).

3.6.3.3 Party Hold

The Party Hold status is set depending on the underlying instruction. If the underlying instruction is not on hold but set
on Hold Claim Cash or Securities at securities account level the claim instruction is set on hold.

OeKB CSD participants can specify on securities account level whether to put compensations and adjustments for cash
and/or securities deliveries on "Party Hold" automatically. Status "Party Hold" is, however, independent of the "CSD
Hold" status described above. By setting the status to Party Hold a CSD participant assumes responsibility for releasing
claim instructions. The "party hold" status is set for the delivering party.

If the status of settlement instructions initially blocked with "Hold" (8) changes or if they are released status messages
(10) are sent.

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3.6.4 Market Claims Settlement

As a result of the above, market claims are settled on the effective payment date of the corporate action at the earliest
(after OeKB CSD has removed the CSD Hold).

Claims may also settle after the effective payment date if

▪ Claims already generated still have status Party Hold or

▪ The claim could not be settled due to insufficient coverage or
▪ The claim was generated and matched after the effective payment date.

As soon as the claim has been settled the OeKB CSD participant receives a confirmation of the claim instruction (12)
and an MT566 Corporate Action Confirmation indicating that it settles a market claim (13).1

Cash Bookings

The cash bookings resulting from the settlement of a market claim in EUR are carried out on a T2S Dedicated Cash
Account (DCA) of the T2S participant. The cash bookings in other currencies are carried out on the Foreign Currency
Cash Account as agreed between OeKB CSD and the customer.

3.6.5 Market Claims by CCP.A

With the implementation of T2S the processes described in the then current version of the General Terms and
Conditions of the CCP.A shall apply. They will be legally binding for the CCP.A and their clearing members.
In stock-exchange transactions settled via the CCP.A ("CCP.A Transactions") both counterparties (CCP.A and clearing
members) hold securities accounts with OeKB CSD. Therefore, these transactions will be considered "Intra CSD"
transactions according to its definition.

The stock-exchange transactions are subject to the CCP.A settlement cycle t+2. Stock-exchange transactions are
considered entitled if their trade date lies before the ex date. Therefore, all stock-exchange transactions are generally
settled on the record date and no claims need to be created by the OeKB CSD. Consequently, transaction management
is only required for "pending items", i.e. transactions not settled on the intended settlement day.

It is not possible, neither for the stock-exchange participant nor afterwards for clearing members or the CCP.A, to set
special transaction indicators (opt-out indicator, cum/ex indicator). Therefore, market claims in CCP Transactions are
considered "case 1" transactions (see table Market Claims Case Models, chapter 3.5).

The OeKB CSD generates market claims (cash and units) for the transactions sent by the CCP.A in compliance with the
standards as described in this guideline document. The Party Hold indicator (chapter 3.6.3.3) will not be considered for
cash market claims. The Party Hold Indicator will be considered for market claims in units.

1
In the case of income payments, PFD instructions (compensation for cash) will be generated and a MT566 will be sent.

In the case of corporate actions, PFD (compensation for cash) or FOP instructions (compensation for securities) will be generated. Depending on the
progress of the migration to the new IT-platform for the processing of corporate actions, a MT566 will also be sent.

19
3.6.6 Market Claims by Commercial Banks

In the case of "actual booking" the commercial banks settle market claims in the same way as the market claims
process of the OeKB CSD. Whether a commercial bank in the event of a reverse claim books a cash distribution and a
reverse claim or considers the reverse claim directly when determining the entitlements (by deduction) is left to the
discretion and business practices of the respective commercial bank.

3.7 SWIFT Messages Related to Market Claims

3.7.1 MT548 Settlement Status and Processing Advice

3.7.1.1 Message Format

Please refer to the Settlement Services SWIFT Manual ISO 15022 published by the OeKB CSD.

3.7.1.2 SWIFT Fields in the Event of a Market Claim

Sequence A - General Information

▪ :23G: - Function of the Message

INST: Response to a settlement instruction

Optional Repetitive Subsequence A1 Linkages

▪ :20C: - Reference
RELA: This field contains “NONREF” if an instruction has been created for an authorised securities account.
PCTI: This field contains the reference of the market claim generated by the OeKB CSD.
The reference must be used every time the instruction is to be cancelled or modified.
PREV: This field contains the customer reference of the underlying instruction.
MITI: Unique transaction reference of the market claim allocated by T2S
CORP: Reference of the corporate action

Mandatory Repetitive Subsequence A2 Status

▪ :25D: Status
This field contains the status of the market claim.

20
Optional Repetitive Subsequence A2a Reason

▪ :24B: - Reason
PEND/PREA: The Party Hold status is set depending on the underlying instruction. If the underlying instruction is
not on hold but set on Hold Claim Cash or Securities at securities account level the claim instruction is set on hold.
PEND/CSDH: CSD Hold is set until the corporate action settles to prevent a market claim from being settled
before the corporate action was carried out.

Optional Sequence B Settlement Transaction Details

▪ :35B: - Identification of the Financial Instrument

The ISIN is used to identify the security.
▪ :36B: - Quantity of Financial Instrument to be Settled
The quantity is specified as nominal value or as number of units (for securities claims).
▪ :19A: - Settlement Amount
Cash value of the market claim (for cash claims).
▪ :97A: - Safekeeping Account
The securities account number of the OeKB CSD customer is specified here.
▪ :22F: - Type of Settlement Transaction
CLAI: The instruction referenced in the status message results from a market claim.
▪ :22F: - Settlement Transaction Condition Indicator
NPAR: Partial settlement is not allowed
▪ :22H: - Receive/Deliver Indicator
APMT: The instruction referenced in the status message is versus payment (SWIFT message MT541 or MT543) (for
cash market claims)
FREE: The instruction referenced in the status message is free of payment (SWIFT message MT540 or MT542) (for
securities market claims)
▪ :98a: - Trade Date/Time
The trade date is taken over from the underlying instruction.
▪ :98a: - Settlement Date/Time
Intended Settlement Date = payment date of the corporate action (PAYD)

Optional Repetitive Subsequence B1 Settlement Parties

▪ The settlement parties are taken over as given in the underlying instruction
▪ :95P: - Place of Settlement
PSET: For identification the BIC of the counterparty (depository) is used as the sole reference.
▪ :95P: - Receiving Agent/Delivering Agent
Depending on the instruction type, either the field Receiving Agent (instruction type DVP, DWP and PFD) or the
field Delivering Agent (instruction type RVP, RWP, PFD) is used to identify the counterparty.

21
▪ :95a: - Receiver's Intermediary 2/Receiver's Intermediary 1/Receiving Custodian/ Buyer
These fields are filled with the option as specified in the SWIFT message sent as instruction or as entered on the
Settlement Client.
▪ :95a: - Deliverer's Intermediary 2/Deliverer's Intermediary 1/Deliverer's Custodian/ Seller
These fields are filled with the option as specified in the SWIFT message sent as instruction or as entered on the
Settlement Client.

3.7.2 MT544-547 Settlement Confirmations

3.7.2.1 Message Format

Please refer to the Settlement Services SWIFT Manual ISO 15022 published by the OeKB CSD.

3.7.2.2 SWIFT Fields in the Event of a Market Claim

Sequence A - General Information

Optional Repetitive Subsequence A1 Linkages

▪ :20C: - Reference
RELA: This field contains “NONREF” if an instruction has been created for an authorised securities account.
PCTI: This field contains the reference of the market claim generated by the OeKB CSD.
PREV: This field contains the customer reference of the underlying instruction.
MITI: Unique transaction reference of the market claim.
CORP: Reference of the corporate action

Mandatory Sequence B Trade Details

▪ :98C: - Effective Settlement Date/Time

Date and time of the effective settlement date
▪ :35B: - Identification of the Financial Instrument
This field only contains the ISIN. The security name is no longer specified.
▪ :22F: - Priority Indicator
PRIR: The instruction with the higher priority determines the priority by which a transaction (an instruction pair) is
settled. For settlement instructions it is possible to choose from 2 priority levels - High Priority (0003) and Normal
Priority (0004). Priority level 0001 (Reserved) is reserved for CSDs and central banks. Priority level 0002 (Top
Priority) is reserved for stock exchanges, MTFs, and CCPs.

22
Mandatory Sequence C Financial Instrument/Account

▪ :36B: - Quantity of Financial Instrument Settled

ESTT: The actual quantity of securities settled.
This field is 0 for PFD (Payment Free of Delivery) instructions.

Mandatory Sequence E Settlement Details

▪ :22F: - Type of Settlement Transaction

CLAI: Used for an instruction resulting from a market claim.

Mandatory Repetitive Subsequence E1 Settlement Parties

▪ :95P: - Delivering Agent

This field is used to identify the counterparty using the BIC.
▪ :95a: - Deliverer's Intermediary 2/Deliverer's Intermediary 1/Deliverer's Custodian/ Seller
Taken over from the underlying settlement instruction
▪ :95a: - Receiving Agent/Receiver's Intermediary 2/Receiver's Intermediary 1/Receiving Custodian/ Buyer
Taken over from the underlying settlement instruction

3.7.3 MT 566 Corporate Action Confirmations

In the case of income payments, PFD instructions (compensation for cash) will be generated and a MT566 will be sent.

In the case of corporate actions, PFD (compensation for cash) or FOP instructions (compensation for securities) will be
generated. Depending on the progress of the migration to the new IT-platform for the processing of corporate actions, a
MT566 will also be sent.

3.7.3.1 Message Format

Please refer to the Settlement Services SWIFT Manual ISO 15022 published by the OeKB CSD.

3.7.3.2 SWIFT Fields in the Event of a Market Claim

Sequence A - General Information

▪ :20C: - Reference
CORP: Reference of the corporate action
▪ :22F: - CAEV Indicator

23
Optional Repetitive Subsequence A1 Linkages

▪ :20C: - Reference
PREV: This field contains the reference of the underlying MT564 REPE.
RELA: This field contains the customer reference of the underlying settlement transaction.

Mandatory Sequence B Underlying Securities

▪ :97A: - SAFE – Safekeeping Account

This field contains the securities account number.
▪ :35B: - Identification of the Financial Instrument
This field contains the ISIN and the security name
▪ :93B: - CONB – Confirmed Balance
UNIT or FAMT: negative sign (N) in the message to the seller of the trade

Optional Sequence C Corporate Action Details

▪ :98A: - XDTE
▪ :98A: - RDTE
▪ :22F: ADDB indicator: Additional Business Process Indicator
CLAI: Used for a corporate action confirmation resulting from a market claim/reverse claim.

Mandatory Sequence D Corporate Action Confirmation

▪ :13A: - CAON – CA Option Number

▪ :22F: - CAOP – Corporate Action Option Code Indicator
CASH: in case of cash distribution
SECU: in case of securities distribution

Optional Repetitive Subsequence D2 Cash Movement

▪ :22H: - Credit Debit Indicator

CRED: Credit of Cash Payment
DBIT: Debit of Cash Payment
▪ :97A: - CASH – Cash Account Number
▪ :19B: - Amount
PSTA: Amount of money posted to the account.
TXFR: Amount relating to a corporate action that is not subject to taxation.
CHAR: Amount of money paid for the provision of financial services received from the market. GRSS: Cash amount
before deductions and allowances have been made.

24
 NETT: Amount of money after tax deduction.
RESU: Amount of money resulting from a foreign exchange conversion.
WITF: Amount of money withheld by the jurisdiction in which the income was originally paid, for which relief at
source and/or reclaim may be possible.
ATAX: Amount of additional taxes that cannot be categorised.
INCO: Amount relating to the underlying security for which income is distributed.
▪ :98A: - Date
PAYD: Payment date
VALU: Value date

Optional Sequence E Additional Information

▪ :70E – Narrative
ADTX: Compensation payment for OTC instruction with trade date DD/MM/YYYY.
or
ADTX: Compensation payment for Stock Exchange instruction with trade date DD/MM/YYYY.

25
4 Transformations

4.1 Definitions

Transformation

“…is defined as the process by which pending transactions still unsettled by the end of Record Date/market deadline, are
cancelled and replaced in accordance with the terms of the reorganisation.”

A transformation is the process which, in the event of a reorganisation, cancels pending settlement instructions and
generates new instructions according to the reorganisation conditions.

According to T2S CA standards transformation processes must be implemented for the transaction management in the
event of mandatory reorganisations (with or without investor choice). Mandatory reorganisation may occur as an event
or as the second part of a distribution with choice.

In T2S reorganisations are characterised by a modification of the ISIN.

Transformation Process

Old ISIN New ISIN

EOD

Announcement Last Trading

Record Date Payment Date
by the Issuer Date

Min. 2 T2S Opening Days Settlement Period Pref. 1 T2S Opening Day
(days of operation) (day of operation)

First Trade Date

Figure 6: Transformations Process Timeline

26
4.2 Transactions Concerned

By definition, T2S transaction management involving reorganisation events must consider all pending settlement
transactions with settlement status "matched" on the record date EOD or are “matched” 20 T2S Opening Days (days of
operation) after the record date. Transformations shall be carried out for such open settlement transactions with event-
related entitlements.2

Settlement instructions with status "unmatched" are not transformed. These settlement instructions are cancelled by
the OeKB CSD.

4.2.1 Transaction Types

Intra CSD

Both counterparties are securities account holders with OeKB CSD. In this case the pending settlement transactions of
both parties will be transformed by the OeKB CSD.

Cross CSD

One counterparty is securities account holder with OeKB CSD. The second counterparty holds a securities account with
another CSD which is a T2S participant. In this case the OeKB CSD will apply the transformation process to the
instruction of the party holding a securities account with OeKB CSD. OeKB CSD is the instruction owner CSD (IOC) for
this instruction. Transaction management for the instruction of the counterparty holding the securities accounts with
the other CSD will be performed by the other CSD.

External

One counterparty is securities account holder with OeKB CSD. The second counterparty holds a securities account with
another CSD which is no T2S participant and which is safekeeping the security to be settled. In this case the
transformation will be performed according to the standards of the respective CSD.

2
Instructions in the old ISIN are accepted until 20 T2S Opening Days (days of operation) after the record date. These Instructions can match but do
not settle.

27
4.2.2 Special Transaction Indicators

Opt-out Indicator

The participants can use the opt-out indicator to specify whether they desire a transformation of their matched
settlement transactions. If they prefer not to have them transformed, only the original instruction will be cancelled. The
instruction then has to be adjusted accordingly by the participant himself.

In order to not participate in the transformation process both settlement parties must have selected the opt-out
indicator, because this will become an additional matching criterion if at least one counterparty has it selected.

Cum/Ex Indicator

The cum/ex indicator is ignored in case of transformations.

4.2.3 Dealing with Fractions Resulting from Transformations

If the calculated quantity of units from a transformation to be generated by the IOC results in a decimal number, the
resulting fractions are either compensated for in cash or not, as announced by the issuer.

If the issuer does not grant a compensation in cash, the transformation instruction to be generated by the instruction
owner CSD shall show the quantity of units commercially rounded down from the maximum number of places allowed
for the ISIN to a maximum of three places after the decimal comma.

If the issuer compensates for any fractions, he announces a reference price for compensations in cash. In addition to
the transformation instruction (unit instruction DFP Delivery Free of Payment – without decimal places) the instruction
owner CSD shall generate another transaction (PFD Payment Free of Delivery), where the cash amount equals the
product of the compensation price and the places after the decimal comma (fractions).

4.3 Transformation-relevant Events

Transformations processes may be required in the Austrian capital market for the following corporate action events if
pending settlement transactions are present on the record date EOD.

CAEV Designation Used in Description

SWIFT User Handbook
BIDS Repurchase Offer Subsequent mandatory payment (under „interim line/ISIN“) as a result of the
(MAND) acceptance of an offer to existing holders by the issuing company to repurchase
its own securities. The objective of the offer is to reduce the number of
outstanding securities.
CHAN Change Information regarding a change further described in the corporate action details.
(if ISIN changes)
CONV Conversion Conversion of securities (generally convertible bonds or preferred shares) into
(MAND) another form of securities (usually common shares) at a pre-stated price/ratio.

28
CAEV Designation Used in Description
SWIFT User Handbook
DETI Detachment Separation of components that comprise a security, for example, usually units
(MAND) comprised of warrants and bond or warrants and equity. Units may be broken up
at the request of the security holder or based on market convention.
EXOF Exchange Exchange of holdings for other securities and/or cash. The exchange can be
(MAND) either mandatory or voluntary involving the exchange of outstanding securities
for different securities and/or cash. For example "exchange offer", "capital
reorganisation" or "funds separation".
EXWA Warrant Exercise Mandatory cash payment at maturity.
(MAND) Mandatory
LIQU Liquidation A distribution of cash, assets, or both. Debt may be paid in order of priority
(MAND) (in case of SECU) based on preferred claims to assets specified by the security.
MCAL Full Call/Early The redemption of an entire issue outstanding of securities, for example, bonds,
Redemption preferred equity, funds, by the issuer or its agent, for example, asset manager,
before final maturity.
MRGR Merger Exchange of outstanding securities, initiated by the issuer which may include
options, as the result of two or more companies combining assets, that is, an
external, third party company. Cash payments may accompany share exchange.
PARI Pari-Passu Occurs when securities with different characteristics, for example, shares with
different entitlements to dividend or voting rights, become identical in all
respects, for example, pari-passu or assimilation. May be scheduled in advance,
for example, shares resulting from a bonus may become fungible after a pre-set
period of time, or may result from outside events, for example, merger,
reorganisation, issue of supplementary tranches, etc.
PCAL Partial Redemption With Securities are redeemed in part before their scheduled final maturity date with
Reduction of Nominal reduction of the nominal value of the securities. The outstanding amount of
Value securities will be reduced proportionally.
REDM Final Maturity The redemption of an entire issue outstanding of securities, for example, bonds,
preferred equity, funds, by the issuer or its agent, for example, asset manager,
at final maturity.
SOFF Spin-off A distribution of subsidiary stock to the shareholders of the parent company
without a surrender of shares. Spin-off represents a form of divestiture usually
resulting in an independent company or in an existing company. For example,
demerger, distribution, unbundling.
SPLF Stock Split/Change in Increase in a corporation's number of outstanding equities without any change
Nominal Value/ in the shareholder's equity or the aggregate market value at the time of the split.
Subdivision Equity price and nominal value are reduced accordingly.
SPLR Reverse Stock Split/ Decrease in a company's number of outstanding equities without any change in
Change in Nominal the shareholder's equity or the aggregate market value at the time of the split.
Value Equity price and nominal value are increased accordingly.
TEND Tender/Acquisition/ Mandatory Cash Payments (e.g. Squeeze Out).
(MAND) Takeover/Purchase
Offer

29
4.4 Identification of Transformations

The following criteria apply when identifying transformations:

▪ The status of the pending settlement transaction on record date EOD and up to 20 T2S Opening Days (days of
operation) after the record date is
▪ Matched: A transformation must be carried out for the complete quantity not yet delivered
▪ Partially settled: A transformation must be generated for the quantity still pending, i.e. not yet delivered,
previously already set to status "matched"
▪ Trade date of the old ISIN lies before or on the last trading date
TRAD <= Last Trading Date
This rule is valid for stock exchange transactions.
Instructions in the old ISIN are accepted until 20 T2S Opening Days (days of operation) after the record date.
These Instructions can match but do not settle.

4.5 Transformations Case Models

4.5.1 Differentiation Between Mandatory Reorganisations with/without Options

For transformation processes differentiation is made between

▪ Transformations for Mandatory Reorganisations Without Options

▪ Transformations for Mandatory Reorganisations With Options

4.5.1.1 Transformations for Mandatory Reorganisations Without Options

Status Matched
EOD
Announcement Last Trading
Record Date Payment Date
by the Issuer Date

minimum T2S Opening Days (days of operation) Settlement Cycle preferably 1 T2S Opening Day (day of operation)

Figure 7: Transformations for Mandatory Reorganisations Without Options

On the record date EOD the instruction owner CSD determines which settlement instructions with entitlements are
pending, cancels them and carries out the transformation process.

30
4.5.1.2 Transformations for Mandatory Reorganisations With Options

Guaranteed Buyer
Announcement Start of Market Payment Date
Participation Protection
by the Issuer ElectionPeriod Deadline of Proceeds
Date Deadline

min. 10 T2S Opening Days (days of operation)

min.1 T2S Opening Day (day of operation)

Settlement Cycle preferably 1 T2S Opening Day (day of operation)

Figure 8: Transformations for Mandatory Reorganisations With Options

In the framework of the buyer protection the OeKB CSD participants agree the selected option between themselves.
The OeKB CSD participants themselves shall be responsible for instructing the quantity of securities or cash to be
delivered.

If there are still pending transactions present after the market deadline has elapsed, they will be cancelled by OeKB
CSD and will be transformed on the record date EOD in compliance with the default option.

4.5.2 Transformations Use Cases

4.5.2.1 Case Model 1 – Final Maturity

▪ Pending settlement transaction with status "matched" for a bond over a nominal value of EUR 3 Mio. before/on
record date EOD.
▪ 100% redemption

Seller X agrees to deliver a bond for the nominal value of EUR 3,000,000 to buyer Y at a price of EUR 3,005,000.

Since the certificates can no longer be delivered the cash side has to be corrected.

After cancelling the underlying settlement transactions in the framework of the transformation process the CSD
generates two PFD instructions for matching in T2S:

▪ Seller X receives the purchase price of EUR 3,005,000 from buyer Y (PFD instruction).
▪ Buyer Y receives the settlement amount of the redemption proceeds of EUR 3,000,000 from seller X (PFD
instruction).

4.5.2.2 Case Model 2 – Reorganisation/Conversion into Multiple ISINs

▪ Pending settlement transaction with status "matched" for 100 units ISIN A at EUR 150 per share.
▪ Conversion of 1 unit ISIN A → into 2 units ISIN B and 3 units ISIN C

31
After cancelling the underlying settlement transactions the quantity of ISIN A to be transformed is determined for ISIN
B and C and the corresponding percentages of the settlement amount are allocated to the ISINs B and C. After that
DVP instructions are generated for each new ISIN.

▪ Total number of units for ISIN B and C for 1 unit ISIN A: 2 + 3 = 5

▪ Percentages of ISIN A allocated ==> 2/5 ISIN B and 3/5 ISIN C
▪ ISIN B: EUR 150 * 2/5 = EUR 60
ISIN C: EUR 150 * 3/5 = EUR 90
▪ DVP transformation instruction from the seller to the buyer: 200 units ISIN B at EUR 60 per share
DVP transformation instruction from the seller to the buyer: 300 units ISIN C at EUR 90 per share

4.5.2.3 Case Model 3 – Reorganisation without Settlement of Fractions in Cash

▪ Pending settlement transaction with status "matched" for 20 units ISIN A at EUR 100 per share.
▪ Conversion of 3 units ISIN A → into 1 unit ISIN B
▪ According to the issuer announcement fractions will not be settled

Firstly, the underlying settlement transaction with status "matched" is cancelled.

The settlement quantity is determined: 20 * 1/3 = 6,6666…
The amount is commercially rounded down to a number with three places after the decimal comma.
The quantity to be instructed in the transformation instruction: = 6,667.

▪ Cancellation of the underlying settlement transaction

▪ For 20 units ISIN A seller X must deliver the quantity of 6.667 units ISIN B at EUR 100 per share to buyer Y (DVP).

4.5.2.4 Case Model 4 – Reorganisation with Settlement of Fractions in Cash

▪ Pending settlement transaction with status "matched" for 20 units ISIN A at EUR 100 per share.
▪ Conversion of 3 units ISIN A → into 1 unit ISIN B
▪ According to the issuer pronouncement fractions will be settled: 1 unit ISIN B will be compensated with EUR 9

Firstly, the underlying settlement transaction with status "matched" is cancelled.

The settlement quantity is determined: 20 * 1/3 = 6.6666… → rounded down to the next whole number: 6.
The resulting fractions of 0.666 of ISIN B will be compensated with EUR 9 * 0.666 = EUR 6.

If fractions remain, the cash amount to be paid for any resulting fractions is determined.
In addition to the transformation instruction (DVP) a PFD (cash) must be generated as well.

▪ Cancellation of the underlying settlement transaction

▪ For 20 units ISIN A seller X must deliver the quantity of 6 units ISIN B at EUR 100 per share to buyer Y (DVP).
▪ Seller X must pay EUR 6 (PFD) to buyer Y.

32
4.6 Transformations Workflow

4.6.1 Total Workflow Overview

CA Notification NEWM
1
OeKB CSD OeKB CSD (MT564)
Asset Settlement CA Notification REPE
Servicing Services 2 (MT564)

Cancellation
3
Detection Settlement Instruction
Transformation Status Settlement
Status Sett. Instruction/ 4 Instruction (sese.024)
4
Confirmation Cancellation

5 Status Settlement
Instruction (MT548)

Transformation OeKB CSD

6
Instruction Participant
Status message Status Settlement
7a Transformation Instruction 7b Instruction (sese.024)

Status Settlement
8
Instruction (MT548)

9 CA Confirmation (MT566)

Confirmation Confirmation Settlement

10 10
Transformation Instruction Instruction (sese.025)

Confirmation Settlement
11
Instruction (MT545/547)

Settlement Services:
Asset Servicing: Communication between OeKB CSD
Communication between OeKB CSD and customer
CA Notification/Confirmation ISO 15022/MT56X and T2S ISO 20022
ISO 15022/ISO 20022

Figure 9: Total Transformations Workflow Overview

4.6.2 Determining Transformation-relevant Settlement Transactions

Using the corporate action event master data communicated to the OeKB CSD participants (1) and (2) by OeKB CSD via
SWIFT MT564 as a basis, the "Transformation Detection" processing for the first time determines pending settlement
instructions relevant for transformations on the record date EOD.

The instruction owner CSD generates transformations based on the settlement transactions with status "matched"
determined on the record date EOD.

4.6.3 Transformation - Cancellation

The underlying instruction is cancelled (3). As soon as the cancellation confirmation is received from T2S (4) the status
message (MT548) about the cancellation is sent to the CSD participant (5).

33
4.6.4 Transformation Generation

The transformed instruction is sent to T2S. The newly generated instruction is flagged as a transformation by setting
the Settlement Transaction Condition Indicator "TRAN" (6).

As soon as the status information is received from T2S (7) the CSD participant receives the status messages (MT548)
for the transformed instruction (8).

Possible Transformations

Depending on the exchange ratios of reorganisations/corporate actions the following transformations may result:

▪ 1 Transformation Instruction DFP

ISIN-old is converted 1:1 into ISIN-new.

▪ n Transformation Instructions DFP

ISIN-old is exchanged for one or more new ISINs.

▪ Transformation Instruction PFD

In the course of transformations fractions remain. These fractions are compensated for in cash.

▪ Transformation Instruction DWP

Transformations comprise the exchange of one ISIN-old for 1-n ISIN-new, with an additional cash settlement.

The above transformation instructions may also occur combined.

34
Validity of old/new ISIN

Every reorganisation in T2S causes a change of ISIN. Instructions in the old ISIN are accepted until 20 T2S Opening
Days (days of operation) after the record date. These Instructions can match but do not settle. Instructions containing
the old ISIN which are received later will be rejected.
Instructions containing the new ISIN (transformation instructions) will be generated with an intended settlement date
that equals the payment date (ISD = PAYD) or lies after the payment date if the intended settlement date of the
underlying transaction lies after the payment date (ISD > PAYD).

Cash Bookings

The cash bookings resulting from transformations in EUR are carried out on a T2S Dedicated Cash Account (DCA) of
the T2S participant. The cash bookings in other currencies are carried out on the Foreign Currency Cash Account as
agreed between OeKB CSD and the customer.

4.6.5 Transformations by CCP.A

With the implementation of T2S the processes described in the then current version of the General Terms and
Conditions of the CCP.A shall apply. They will be legally binding for the CCP.A and their clearing members.

Transformations in CCP.A transactions have to be carried out for all positions and their pending settlement instructions
in T2S not yet settled by the record date EOD. The transformation of the pending (and matched) settlement instruction
is performed by OeKB CSD and consequently based on the received MT548 status messages the transformation of the
pending linked position is also carried out directly in the CCP.A Clearing System.

4.7 SWIFT Messages Related to Transformations

4.7.1 MT548 – Status Message for the Cancellation of the Underlying Instruction

4.7.1.1 Message Format

Please refer to the Settlement Services SWIFT Manual ISO 15022 published by the OeKB CSD.

4.7.1.2 SWIFT Fields in the Event of a Cancellation of the Underlying Instruction

Sequence A - General Information

▪ :23G: - Function of the Message

INST: Status message to a cancelled instruction

35
Optional Repetitive Subsequence A1 Linkages

▪ :20C: - Reference
RELA: This field contains the customer reference of the MT54x SWIFT message that was sent.
MITI: Unique transaction reference of T2S

Mandatory Repetitive Subsequence A2 Status

▪ :25D: Status
CAND

Optional Repetitive Subsequence A2a Reason

▪ :24B: - Reason
CANT (Cancelled due to Transformation)

4.7.2 MT548 – Status Message for a Transformation

4.7.2.1 Message Format

Please refer to the Settlement Services SWIFT Manual ISO 15022 published by the OeKB CSD.

4.7.2.2 SWIFT Fields in the Event of a Transformation

Sequence A - General Information

▪ :23G: - Function of the Message

INST: Response to a settlement instruction

Optional Repetitive Subsequence A1 Linkages

▪ :20C: - Reference
RELA: This field contains NONREF if an instruction has been created for an authorised securities account.
PCTI: This field contains the reference of the transformation generated by the OeKB CSD. The reference must be
used every time the instruction is to be cancelled or modified.
PREV: This field contains the customer reference of the cancelled underlying instruction.
MITI: Unique transaction reference of the transformation allocated by T2S
COMM: The common reference is taken over from the underlying instruction.
CORP: Reference of the corporate action

36
Mandatory Repetitive Subsequence A2 Status

▪ :25D: Status
This field contains the status of the transformation.

Optional Repetitive Subsequence A2a Reason

▪ :24B: - Reason
PEND/PREA: The Party Hold status is set depending on the underlying instruction.

Optional Sequence B Settlement Transaction Details

▪ :35B: - Identification of the Financial Instrument

The (new) ISIN is used to identify the security.
▪ :36B: - Quantity of Financial Instrument to be Settled
The (transformed) quantity is specified as nominal value or as number of units.
▪ :19A: - Settlement Amount
(Transformed) settlement amount of the instruction
▪ :97A: - Safekeeping Account
The securities account number of the OeKB CSD customer is specified here.
▪ :22F: - Type of Settlement Transaction
TRAD: The transaction type is set depending on the underlying instruction.
▪ :22F: - Settlement Transaction Condition Indicator
TRAN: Identifies the instruction as transformation
NPAR: Partial settlement is not allowed (taken over from the underlying instruction).
PART: Partial settlement is allowed (taken over from the underlying instruction).
▪ :22H: - Receive/Deliver Indicator
DELI: depending on the underlying instruction
RECE: depending on the underlying instruction
▪ :22H: - Payment Indicator
APMT: depending on the underlying instruction
FREE: depending on the underlying instruction
▪ :98a: - Trade Date/Time
The trade date is taken over from the underlying instruction.
▪ :98a: - Settlement Date/Time
Intended Settlement Date = ISD of the underlying instruction or payment date, whichever is last.

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Optional Repetitive Subsequence B1 Settlement Parties

The settlement parties are taken over as given in the underlying instruction

▪ :95P: - Place of Settlement

PSET: For identification the BIC of the counterparty (depository) is used as the sole reference.
▪ :95P: - Receiving Agent/Delivering Agent
Depending on the instruction type, either the field Receiving Agent (instruction type DVP, DWP and PFD) or the
field Delivering Agent (instruction type RVP, RWP, PFD) is used to identify the counterparty.
▪ :95a: - Receiver's Intermediary 2/Receiver's Intermediary 1/Receiving Custodian/ Buyer
These fields are filled with the option as specified in the SWIFT message sent as instruction or as entered on the
Settlement Client.
▪ :95a: - Deliverer's Intermediary 2/Deliverer's Intermediary 1/Deliverer's Custodian/ Seller
These fields are filled with the option as specified in the SWIFT message sent as instruction or as entered on the
Settlement Client.

4.7.3 MT544-547 Settlement Confirmation

4.7.3.1 Message Format

Please refer to the Settlement Services SWIFT Manual ISO 15022 published by the OeKB CSD.

4.7.3.2 SWIFT Fields in the Event of a Transformation

Sequence A - General Information

▪ :22F: - Partial Settlement Indicator

PAIN: This indicator is sent with messages where only partial settlement of the instruction was possible.
PARC: This indicator is sent with the last message to confirm that the last remaining part was settled.

Optional Repetitive Subsequence A1 Linkages

▪ :20C: - Reference
RELA: This field contains NONREF if an instruction has been created for an authorised securities account.
PCTI: This field contains the reference of the transformation generated by the OeKB CSD. The reference must be
used every time the instruction is to be cancelled or modified.
MITI: Unique transaction reference of the transformation allocated by T2S
COMM: Common Reference Underlying Instruction
CORP: Reference of the corporate action

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Mandatory Sequence B Trade Details

▪ :98C: - Effective Settlement Date/Time

Date and time of the effective settlement date
▪ 35B: - Identification of the Financial Instrument
This field only contains the ISIN. The security name is no longer specified.
▪ 22F: - Priority Indicator
PRIR: The instruction with the higher priority determines the priority by which a transaction (an instruction pair) is
settled. For settlement instructions it is possible to choose from 2 priority levels - High Priority (0003) and Normal
Priority (0004). Priority level 0001 (Reserved) is reserved for CSDs and central banks. Priority level 0002 (Top
Priority) is reserved for stock exchanges, MTFs, and CCPs.

Mandatory Sequence C Financial Instrument/Account

▪ :36B: - Quantity of Financial Instrument Settled

ESTT: The actual quantity of securities settled. In case of partial settlement the settled part is indicated. This field
is 0 for PFD (Payment Free of Delivery) instructions.
▪ :36B: - Quantity of Financial Instrument Previously Settled
PSTT: In case of partial settlement the part that was already settled.
▪ :36B: - Quantity of Financial Instrument remaining to be settled
RSTT: In case of partial settlement the part that was not yet settled.

Mandatory Sequence E Settlement Details

▪ :22F: - Type of Settlement Transaction

TRAD:
▪ :22F: -Settlement Transaction Condition Indicator
The indicator is set depending on the underlying instruction.
TRAN: Identifies the instruction as transformation
NPAR: Partial settlement of an instruction is not allowed.
PART: Partial settlement of an instruction is allowed.

Mandatory Repetitive Subsequence E1 Settlement Parties

▪ :95P: - Delivering Agent

This field is used to identify the counterparty using the BIC.
▪ :95a: - Deliverer's Intermediary 2/Deliverer's Intermediary 1/Deliverer's Custodian/ Seller
Taken over from the underlying settlement instruction
▪ :95a: - Receiving Agent/Receiver's Intermediary 2/Receiver's Intermediary 1/Receiving Custodian/ Buyer
Taken over from the underlying settlement instruction

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5 Special scenarios regarding the generation of claims
and transformations

5.1 Claims/transformations for instructions of the transaction type External

(custodian of OeKB CSD does not use T2S)

Claims/transformations from a transaction with an external CSD generated by the external CSD will be booked by
OeKB CSD accordingly.

5.2 Claims/transformations for instructions of the transaction type Cross with

the custodian Euroclear France

Due to the complexity of the French capital market regarding the fiscal specialties, OeKB CSD does not create claims
or transformations for Cross CSD instructions with Euroclear France. Such claims and transformations are to be
processed bilaterally between the OeKB CSD’s client and his business partner having a securities account with
Euroclear France.

5.3 Claims/transformations in Non-EUR (not converted in EUR)

Claims/transformations from an INTRA CSD transaction (between 2 OeKB CSD participants) will be performed by
OeKB CSD if the distribution currency is a non-EUR currency that will not be converted. With this constellation, no
MT54X messages will be created since the processing is not carried out via T2S. This currently includes the following
currencies: ARS, AUD, BGN, CAD, CHF, CZK, GBP, HKD, HRK, HUF, JPY, NOK, NZD, PLN, RON, RUB, SEK, TRY, USD,
ZAR.

Claims/transformations from a CROSS CSD transaction (between an OeKB CSD participant and a participant of a
different T2S CSD) in a non-EUR currency that will not be converted will be processed by OeKB CSD if OeKB CSD
acts as Issuer CSD and the distribution currency is one of the currencies mentioned above.

Claims/transformations from a CROSS CSD transaction (between an OeKB CSD participant and a participant of a
different T2S CSD) in a non-EUR currency that will not be converted and where OeKB CSD acts as Investor CSD will
be booked accordingly if the claim/transformation was generated by the custodian (Issuer CSD) of OeKB CSD.

5.4 Claims/transformations in Non-EUR (converted in EUR)

In the case of a conversion from non-EUR in EUR

- INTRA CSD transactions (between 2 OeKB CSD participants) and

- CROSS CSD transactions (between a OeKB CSD participant and a participant of a different T2S CSD) in
securities where OeKB CSD acts as Issuer CSD

40
no claims and transformations will be generated.

Claims/transformations from a CROSS CSD transaction (between an OeKB CSD participant and a participant of a
different T2S CSD) in a non-EUR currency that will be converted in EUR and where OeKB CSD acts as Investor CSD
will be booked accordingly if the claim/transformation was generated by the custodian of OeKB CSD.

5.5 Overview regarding the generation of Claims und Transformations

Distribution currency

non-EUR
Instruction Type EUR
Not converted Converted in EUR

Claim will be booked

OeKB CSD directly on the non EUR
is Issuer cash accounts of the OeKB no claims and
Claim/transformation CSD participant with OeKB
Intra or transformations will be
will be generated CSD
Investor generated
CSD Transformation will be
generated

OeKB CSD no claims and no claims and

is Issuer transformations will be transformations will be
CSD generated generated

Claim/transformation
Cross If compensation is If compensation is
will be generated
OeKB CSD generated by the custodian generated by the custodian
is of OeKB CSD of OeKB CSD
Investor booking accordingly on the booking accordingly on the
CSD Cash/Securities account of Cash/Securities account of
OeKB CSD participant OeKB CSD participant

If compensation is If compensation is If compensation is

OeKB CSD generated by the generated by the custodian generated by the custodian
is custodian of OeKB CSD of OeKB CSD of OeKB CSD
External
Investor booking accordingly on booking accordingly on the booking accordingly on the
CSD the Securities account of Securities account of OeKB Securities account of OeKB
OeKB participant CSD participant CSD participant

41
6 Buyer Protection

6.1 Definitions

Buyer Protection

In line with market standards for CA, buyer protection (BP) is a process whereby a buyer who has yet to receive the
underlying securities of an elective Corporate Action, instructs the seller in order to receive the outturn of his choice.
Automated Buyer Protection mechanism: an institutionalised and automated service provided by market infrastructure
organisations (i.e. where the election instruction is routed through the CSD/CCP, and where the CSD/CCP uses the BP
instruction to process the transformation).

Manual Buyer Protection mechanism: a bi-lateral agreement between the respective trading parties by means of a manual
process (no intervention of the market infrastructure regarding the exchange of BP instructions).

BP invocation

Buyer protection deadline is invoked on “the last date and time at which a ‘buying counterparty’ that has the legal right to
choose a particular event option but does not yet hold the securities (i.e. a party in an unsettled transaction) may instruct
its counterparty to deliver the specified proceed/s”.

Guaranteed Buyer
Announcement Start of Election Custodian Market
Participation Protection Payment Date
by the Issuer Period Deadline Deadline
Day Deadline

Min. 2 T2S Opening Days Settlement Cycle Pref. 1 T2S Opening Day
(days of operation) (day of operation)

Min. 1 T2S Opening Day

(day of operation)

Min. 10 T2S Opening Days (days of operation)

Figure 10: Buyer Protection Timeline

6.2 Buyer Protection OeKB CSD

With the buyer protection it is possible, in the event of the seller being late to deliver the securities, for the buyer to
participate in an optional corporate action. This is done by the seller, who submits an instruction with the appropriate
agent (depository or other agent) that conforms with the buyer's request.

The OeKB CSD provides the Excel sheet "Buyer Protection Instruction (BPI)" as a sample on its website. With such an
Excel sheet both counterparties can make a bilateral agreement to ensure the buyer's participation in the optional
corporate action.

If the "Buyer Protection Deadline" and "Guaranteed Participation Date" data are made available to the OeKB CSD, they
will be communicated in the SWIFT MT564 together with the other basic data about the optional corporate action.

42
Starting with the implementation of version 2 of the Asset Services System a daily transfer in SWIFT MT564 of "Pending
Trades" will be sent for each purchase or sale (balances) from the end-of-day of the first announcement by the OeKB
CSD through the end-of-day of the market deadline of the optional corporate action.

Each/every customer is responsible for cancelling the original delivery/payment instruction.

6.3 Buyer Protection CCP.A

The CCP.A's set of regulations already includes buyer protection measures (buy-in process). If a participant applies for
a special buyer protection exceeding these provisions a special manual process is being applied. The CCP.A will
disclose the counterparties to one another and hand over settlement to the counterparties for bilateral processing. This
method is identical with the practise common for international CCPs.

43
7 Glossary
Term/Abbreviation Description/Meaning
CANIG Corporate Actions National Implementation Group
The CANIG is a working group comprising employees of the different participants in the
Austrian capital market, who compile and prepare recommendations about how to introduce
CAJWG Standards in Austria..
CAJWG Corporate Actions Joint Working Group
The Corporate Actions Joint Working Group is a group of experts established by the BSG in
order to create standards for eliminating the Giovannini Barrier 3. The CAJWG members are
listed in Annex 1 of the Market Standards: http://www.ebf-
fbe.eu/uploads/CAJWG%20Standards%20revised%20version%202012%20final%20clean%20_
%20priorities%20marked.pdf
CASG Corporate Actions Sub Group

CCP.A Central Counter Party responsible for clearing stock-exchange transactions. The Austrian
CCP is the CCP Austria.
CROSS-CSD One settlement party is OeKB CSD participant, the other is T2S participant

CSD The Central Securities Depository.

DFP Delivery Free of Payment; T2S instruction type for the settlement of units.

DWP Delivery With Payment; T2S instruction type for the settlement of units and cash.

External-CSD One settlement party is OeKB CSD participant, the other is not and neither is T2S participant

Intra-CSD Both settlement parties are OeKB CSD participants

IOC Instruction Owner CSD

OeKB CSD Austrian National CSD, 100% subsidiary of OeKB

PFD Payment Free of Delivery; T2S instruction type for the settlement of cash.

Record Date EOD Record Date End Of Day

T2S CA Standards T2S Corporate Action Standards

44
45
 1010 Vienna, Austria
Strauchgasse 3
Tel. +43 1 531 27-2100
csd@oekb-csd.at
www.oekb-csd.at