Safe Financials - Home of the CREST Simulator

Several factors are taken into account when determining if claims will be generated. This page gives a breakdown of the basic requirements that need to be in place in order for a claim to be generated. This is by no means an exhaustive treatment and the Crest manuals should be referred to for further information.

1. Ensure you have an open transaction [trade which is at matched or waiting to settle status]

4. Ensure the transaction has a trade date which is before the ex date of your corporate action and a settlement date which is after the record date.

The following tables illustrate some examples of the different combinations for which a Claim is generated [or not] assuming other claim generation conditions have been met.

3. If above are different, then a claim will be generated in favour of the beneficiary.

Where the Ex Date falls before the record date, this is a cash distribution but in a stock distribution, the record date is before the Ex date.

exdate before record date

NOTE

Name On Register = Seller
Benefit Entitlement = Seller

As both the seller and beneficiary are the same, no claim is generated

As this trade remains unsettled on the Record date, the seller's name remains on the Registrar's books.

A claim is not generated because the Seller receives the benefit directly from the company since he is on the record date register.

exdate before record date

NOTE

Name On Register = Buyer
Benefit Entitlement = Seller

If any of the above names are different, then a claim will be generated in favour of the beneficiary[seller].

Since this transaction is taking place after the Ex date, the buyer is not entitled to any benefits.

ex date before record date

NOTE

Name On Register = Seller
Benefit Entitlement = Buyer

If above is different, then a claim will be generated in favour of the buyer.

As this transaction is traded before Ex date, the buyer is entitled to the benefits; but because the trade doesn't settle until after the record date, the Seller remains on the Registrar's record. A claim is generated to give the Buyer the benefit.

ex date before record date

NOTE

Name On Register = Seller
Benefit Entitlement = Seller

As both the registered owner and the beneficiary are the same, no claim is generated.

The registered shareholder of this stock is the Seller because the transaction was still open on the record date.

A claim is not raised as the stock is sold without benefits.

record date before exdate

NOTE

Name On Register = Seller
Benefit Entitlement = Buyer

If above is is different, then a claim is generated in favour of the beneficiary [buyer].

This stock is traded with benefits [trade date is before Ex date] therefore the buyer gets the benefits and if the registrar has the name of the seller on his records, then a claim is generated.

recorddate before exdate

NOTE

Name On Register = Seller
Benefit Entitlement = Buyer

If above is different, then a claim is generated in favour of the buyer[beneficiary].

Very Similar to above table with the difference that the trade settles before Ex date- this does not affect the benefit entitlement.

record date before exdate

NOTE

Name On Register = Seller
Benefit Entitlement = Seller

As both the seller and beneficiary are the same, no claim is generated

This stock is traded without benefit and because it is traded and settled after record date, the registrar's record will have the seller as the shareholder.

recordate before exdate

NOTE

Name On Register = buyer
Benefit Entitlement = Buyer

As both the buyer and beneficiary are the same, no claim is generated

This stock distribution shows that the stock is traded and settled before the record date therefore the Registrar will have the buyer on his records.

The Dates/Periods explained:

• The ex date: On this date, the shareholder is eligible for the benefit of a corporate action.

• The record date: This is the date when the security’s register is compiled for the benefit distribution.

• The payment date: The date in which the stock and/or cash benefit is distributed. This must be on or after the ex date and record date.

• Special ex: A period between the special ex date and the ex date (10 business days apart). Unless a special condition has been indicated, the holder of the stock in this period will receive the benefit. If a special condition is indicated, a claim will be generated so the seller of the stock will receive the benefit, regardless of the stock owner on ex date.

• Special cum: A limited period after the ex date. Unless a special condition has been indicated, the holder of the stock in this period will receive the benefit. If a special condition is indicated, a claim will be generated so the buyer of the stock will receive the benefit, regardless of the stock owner on ex date.

• The announcement date: The date in which the corporate action is announced.

• Cum period: The period between the earliest date (usually the announcement date or record date) and the ex date.

• Ex period: The period after the ex date.