ProductGuide - Medium-term notes by lq3233

VIEWS: 0 PAGES: 12

									Medium-term notes


May 2008
        Medium-term notes


        Table of contents

1.0     Introduction                                                          3
2.0     Summary                                                               3
2.1     Signification of medium-term notes                                    3
2.2     Settlement of medium-term notes                                       4
2.3     Advantages                                                            4
2.3.1   For the MPA (only valid for admitted medium-term notes)               4
2.3.2   For safekeeping agents for other medium-term notes (admitted or
        unregistered)                                                         5
3.0     Prerequisites                                                         5
3.1     Technical requirements                                                5
3.1.1   Field 35B (Generic specifications)                                    6
3.2     SIS eligibility - requirements                                        6
3.2.1   ISIN                                                                  6
3.2.2   Types of securities                                                   6
3.2.3   Regular coupon maturities                                             6
3.2.4   Final maturities without conversion or automatic reinvestment         6
3.2.5   Other special conditions                                              7
3.2.6   Additional requirements for unregistered medium-term notes            7
3.3     Dematerialised medium-term notes                                      7
3.3.1   Contractual basis                                                     7
3.3.2   Technical requirements                                                7
3.3.3   Identification                                                        8
4.0     Service description                                                   9
4.1     Procedure if an application for admission has been made by the MPA    9
4.1.1   Registration                                                          9
4.1.2   Fictitious contracts                                                  9
4.1.3   Order processing                                                      9
4.2     Procedure if no application for admission has been made by the MPA   10
4.2.1   SIS eligibility                                                      10
4.2.2   Reduced paying agent (RPA: paying agent for unregistered medium-
        term notes)                                                          10
4.2.3   Identification                                                       10
4.2.4   Order processing                                                     10
5.0     Pricing                                                              12
6.0     Documentation                                                        12
7.0     Contacts                                                             12




        PG_Kassenobligationen_LNI_E_290508.doc
        Medium-term notes
        29.05.2008 / POA                                                     2/12
      Medium-term notes


1.0   Introduction

      The service range of SIS SegaInterSettle (SIS) includes the safe custody and
      administration of medium-term notes (individual maturities). SIS participants
      benefit from these services as:

      -      the number of funds transfers is reduced;

      -      administrative tasks are eliminated.

      The above-mentioned product will be explained in detail in this ProductGuide. A
      summary of the main points is given in chapter 2.0. Summary.

2.0   Summary

2.1   Signification of medium-term notes

                                               Medium-term notes
                   Main paying agent (MPA)
                                                    Safekeeping agent for other
                   for own medium-term
                                                    medium-term notes
                   notes
Definition         All admitted, physical and       All physical medium-term notes
                   dematerialised medium-term
                   notes
Major              Simplified liquidity planning,   The vault can be emptied and all
advantage          elimination of administrative    administrative tasks outsourced to
                   tasks, SECOM reporting and       SIS.
                   many others
Procedure          Registration effected by MPA     Simple physical remittance by
Registration       using form (411/1-2)             safekeeping agent

Legal basis        Contract upon first
                   remittance of dematerialised
                   medium-term notes



      SIS participants are entitled to deposit individual securities with SIS. In addition
      to remitting their own medium-term notes, participants have the possibility of
      acting as a main paying agent (MPA) even for securities whose issuer is not a
      SIS participant.

      SIS offers to act as a main paying agent (MPA) for medium-term notes without
      application for admission, but which are booked in SIS' records. A few
      requirements nevertheless need to be met:

      -   The issuer needs to maintain a connection to SIC (direct connection or via its
          principal bank).


      PG_Kassenobligationen_LNI_E_290508.doc
      Medium-term notes
      29.05.2008 / POA                                                                   3/12
        Medium-term notes


        -   If the issuer is not a bank, the remitting party needs to be in a position to
            state the name of the issuer's principal bank upon SIS' request.

2.2     Settlement of medium-term notes

        The following summary gives an overview of the main features of this product.

                                                Medium-term notes (MTN)
                               Admitted MTN      Dematerialised MTN Unregistered MTN
                                                                     RPA (reduced paying
                                                                     agent: paying agent
        Terms                  MPA (main paying agent)
                                                                     of unregistered
                                                                     securities)
                                                  Application for
                               Application for
        SIS eligibility                           admission by MPA   Remittance by
                               admission by MPA
        through …                                 (form 411/1-2) and safekeeping agent
                               (form 411/1-2)
                                                  contract
        Possibility of
        depositing             Physical             Dematerialised          Physical
        shares
        Field 35B
        (Generic               Maturity date
        specifications)

        Requirements           - ISIN
        regarding              - Bearer and registered securities with fixed maturity date
        securities             - SIC connection of RPA

        Identification
                               Custodian (CSD of                           Custodian
        (Query/Master                               Deposit Bank
                               origin) CH.000'057                          CH.000'057
        data report)
        Technical                                                          Processing of field
                               Processing of field 35B
        requirements                                                       35B
        Physical               Remittance to SIS                           Remittance to SIS in
        remittances            in Olten                                    Olten
        Physical
                               PTF NO-PH                                   PTF NO-PH
        withdrawal
        Deliveries
                               DVP/RVP or DFP/RFP                          DVP/RVP or DFP/RFP
        between banks
        Nostro SCA             SIS                  Deposit Bank           SIS
        Issue of new
                               Input delivery       ATF                    Input delivery
        holdings
                                                    Contract upon first
                                                    remittance of
        Legal basis
                                                    dematerialised
                                                    medium-term notes



2.3     Advantages

2.3.1   For the MPA (only valid for admitted medium-term notes)

        -   Thanks to SECOM Cash Plan, simplified liquidity planning for interest
            payments and redemptions


        PG_Kassenobligationen_LNI_E_290508.doc
        Medium-term notes
        29.05.2008 / POA                                                                          4/12
        Medium-term notes


        -   Fewer funds transfers due to automatic debiting in SECOM

        -    Online real-time reconciliation on the money side by means of status
            intimations

        -   Elimination of administrative tasks:
            - Receipt and initial verification of coupons and certificates
            - Safekeeping and destruction of coupons and Certificates

        -   Standardised SECOM reporting

2.3.2   For safekeeping agents for other medium-term notes
        (admitted or unregistered)

        -   Elimination of vault management

        -   More convenient cash management due to SECOM planning facilities (only for
            admitted medium-term notes)

        -   Online real-time reconciliation both on the money- and on the security-side
            by means of status intimations and standardised SECOM reporting

        -   Credits are effected via SIC on the correct value date

        -   Reduction of administrative work: Detach coupons, establish “bordereau”
            (list of securities to be delivered), final control of securities to be delivered

        -   No dispatch or postage costs

        -   Elimination of risk of loss and no need for insurance during dispatch

        -   No tasks in connection with monitoring and reminders

3.0     Prerequisites

3.1     Technical requirements

        For the registration of medium-term notes, form 411/1-2 is used. It can be
        indicated on the form whether the securities are kept in physical or
        dematerialised form.

        Valid for all SECOM participants

        The participants' systems must be able to read the field "Generic specification"
        (field 35B/second subfield, first line) containing the maturity date since this
        ensures flawless identification of medium-term notes.


        PG_Kassenobligationen_LNI_E_290508.doc
        Medium-term notes
        29.05.2008 / POA                                                                 5/12
        Medium-term notes


        Further information is available on the website of SIS: www.sec.sisclear.com >
        SIS Private > SECOM > Business Partner Specifications.

3.1.1   Field 35B (Generic specifications)

        Maturity date

        Medium-term notes can only be recognised as such by SECOM if the maturity
        date is entered as second item in field 35B.

        Delivery orders that do not contain the correct maturity date will be rejected by
        SECOM.

3.2     SIS eligibility - requirements

3.2.1   ISIN

        Each medium-term note must have an ISIN in order to be SIS-eligible. A
        separate ISIN is allocated per interest rate and issuer.

3.2.2   Types of securities

        SIS accepts both bearer and registered securities for collective custody.

3.2.3   Regular coupon maturities

        Most issued medium-term notes have standardised coupon maturities and can
        therefore be introduced in SECOM without any difficulties.

        Special case: medium-term notes as savings

        Interest and compound interest is paid together with the final redemption. This
        type is SIS-eligible.

        Medium-term notes with irregular coupon maturities, which are issued rarely,
        require an automatic calculation of broken and accrued interest. As SECOM does
        not provide this facility, this category needs to be processed manually.

3.2.4   Final maturities without conversion or automatic reinvestment

        Prior determination of the redemption terms (including the date) as well as of
        any possibilities of premature redemption is mandatory.

        If the redemption or reinvestment of medium-term notes involves a decision by
        the participant, the securities cannot be held in collective custody since they
        need to be processed in different ways.


        PG_Kassenobligationen_LNI_E_290508.doc
        Medium-term notes
        29.05.2008 / POA                                                             6/12
        Medium-term notes


3.2.5   Other special conditions

        Under sections 3.4.1 to 3.4.4, the criteria for SECOM eligibility are described. It
        is, however, possible that other types of medium-term notes exist that cannot be
        kept with SIS although they meet all the above-mentioned criteria. The above is
        therefore not exhaustive. If SIS participants are having any doubts in this
        respect, they can contact the New Issues team for clarification (see list of SIS
        contacts under www.sec.sisclear.com > SIS Private > Contacts).

3.2.6   Additional requirements for unregistered medium-term notes

        If the issuer is not a bank or a bank without SIC connection, the remitting party
        needs to be in a position to state the name of the principal bank maintaining a
        SIC connection. Otherwise, the securities will be returned to the remitting bank.

3.3     Dematerialised medium-term notes

3.3.1   Contractual basis

        When a MPA submits its first application for admission of dematerialised
        medium-term notes or for dematerialisation of existing medium-term notes
        respectively, the contract for the admission of dematerialised medium-term
        notes must be signed. SIS opens the necessary nostro account for the custodian
        bank once the contract has been signed.

3.3.2   Technical requirements

        In order to ensure smooth processing, the following requirements must be
        fulfilled:

        Custodian banks with dematerialised medium-term notes

        The custodian bank's EDP system must be capable of receiving the following
        status intimations for position transfer (PTF) orders

        -   MT598-123          „Request for confirmation of position transfer order“

        -   MT598-125          'Cancellation request for position transfer order'

        and of transmitting the following messages to SECOM:

        -   MT598-124          Confirmation of Position Transfer Order

        -   MT598-126          Response to Cancellation Request

        Please refer to the Business Partner Specifications, Volume 4 > Status
        intimations for details on the above-mentioned messages.

        PG_Kassenobligationen_LNI_E_290508.doc
        Medium-term notes
        29.05.2008 / POA                                                               7/12
        Medium-term notes


3.3.3   Identification

        Dematerialised medium-term notes are identified by the custodian information in
        the securities master data. This information is provided with RDME110 "Changes
        to security details" or can be queried in SECOM ("Security details", MT598-856).
        If the custodian is a Swiss Business Partner, but CH.000'057 has not been
        entered, the securities are kept in dematerialised form.




        PG_Kassenobligationen_LNI_E_290508.doc
        Medium-term notes
        29.05.2008 / POA                                                             8/12
        Medium-term notes


4.0     Service description

4.1     Procedure if an application for admission has been made by the MPA

4.1.1   Registration

        Admission is only possible if all technical requirements as described in section
        3.0 are met.

        It is initialised by the MPA with the form "Application for Admission of Bank-
        issued Medium-term Notes to the SECOM System" (411/1-2). A separate form
        must be submitted for each issuer.

        SIS recommends that MPAs apply for registration of interest-bearing medium-
        term notes even if there are no outstanding securities.

        Additional application forms can be ordered from the SIS New Issues team or
        downloaded from the Internet (www.sec.sisclear.com) under SIS Private >
        Forms.

4.1.2   Fictitious contracts

        If the MPA prefers not to have the coupons physically detached, it can conclude
        a special contract (“Contract for fictitious coupon detachment with regulation of
        destruction of securities and coupons”) with SIS.

        Existing fictitious contracts ("imaginary agreement") are valid for all outstanding
        medium-term notes and those to be issued in the future that are/will be kept
        with SIS per MPA.

        Identification

        As with funds, SIS participants are informed via the master data report
        (RDME110) or can start a SECOM query ("Security details"/MT598-856).

        In the case of physically deposited medium-term notes, the BP ID of the MPA
        and the custodian CH.000'057 (central vault in Olten) are indicated.

4.1.3   Order processing

        For medium-term notes involving a MPA, the entire order processing (including
        issue of new medium-term notes, new holdings etc) is identical to the processing
        of funds. Prior to any larger physical remittance of medium-term notes, SIS in
        Olten should be contacted and a list of all securities to be delivered should be
        submitted.




        PG_Kassenobligationen_LNI_E_290508.doc
        Medium-term notes
        29.05.2008 / POA                                                               9/12
        Medium-term notes


4.2     Procedure if no application for admission has been made by the MPA

4.2.1   SIS eligibility

        Securities remitted by banks are automatically SIS-eligible. An approval of the
        issuer is not required since SIS can decide itself on any acceptances of
        securities. The criteria stated in chapter 3.2, however, need to be met.

4.2.2   Reduced paying agent (RPA: paying agent for unregistered medium-term
        notes)

        If a bank has not arranged for the medium-term notes to become SIS-eligible by
        submitting an application for admission itself and if another bank delivers them
        to SIS for custody, the role of a RPA is assigned in SECOM to the issuer or to its
        principal bank.

        Deliveries (certificates, coupons and proofs of holdings) are sent by post
        (recommendation: registered mail/insured). After receipt of the securities, the
        RPA is responsible for executing interest payment and redemptions on the
        correct value date.

4.2.3   Identification

        Both the master data report and the SECOM queries indicate CH.000'073 (SIS
        Zurich) as MPA and CH.000'057 (central vault in Olten) as custodian for all
        unregistered medium-term notes.

4.2.4   Order processing

        Withdrawals and deliveries versus payment can be settled analogously to
        transactions involving other types of physical securities. It is important to note
        that physical movements should not take place during the five bank working
        days prior to any interest maturity as, at this stage, the coupons or the
        certificates respectively are sent to the RPA.




        PG_Kassenobligationen_LNI_E_290508.doc
        Medium-term notes
        29.05.2008 / POA                                                              10/12
Medium-term notes




                     SIC                      BP


              BP

                    4b


              SIS

         4b         4a
                                                   1

              RPA

         4a



                                     2




                                         3
              RPA                            SIS


      1. The participant remits the physical medium-term notes together with
         the delivery notice to SIS. Participants with greater volumes are
         requested to contact the Physical Deliveries team of SIS:
         www.sec.sisclear.com > SIS Private > Contacts.

      2. Upon registration by the MPA, securities become SIS-eligible. If they
         have not been registered by the MPA, SIS assigns the role of a RPA to
         the issuer (or its principal bank in case the issuer is not a bank). The
         RPA ensures that interest payments and redemptions via SIC in favour
         of SIS (BC no. 88877) are effected on the correct value date. An
         existing SIC connection is thus a prerequisite. Otherwise the physical
         securities are returned to the remitting party.

      3. Five working days prior to the ex date, the physically removed coupons
         are posted together with the proof of holdings to the RPA. At the same
         time, the RPA is asked to initiate SIS SIC account to be credited
         accordingly. The remitting party should take into account that during
         the five bank working days prior to the interest maturity date or expiry
         respectively no securities are remitted or withdrawn.

      4. Once the RPA has made the credit, SIS can forward the amount to the
         SIC account of the participant (beneficiary). The amount can only be
         paid on the correct value date if the entire amount (as with any


PG_Kassenobligationen_LNI_E_290508.doc
Medium-term notes
29.05.2008 / POA                                                             11/12
      Medium-term notes


                ordinary corporate action, no partial payments are made) has been
                credited to SIS SIC account on the value date before 12:00 noon
                (CET).

5.0   Pricing

      The latest fee schedule is available on www.sec.sisclear.com under SIS Private >
      MarketGuide > General Information > Pricing SIS.

6.0   Documentation

      The deadlines applicable in the different markets are published on the SIS
      website www.sec.sisclear.com under SIS Private > MarketGuide > Country
      Information.

7.0   Contacts

      Should you have any queries or require further information, please do not
      hesitate to contact us. You will find a list of SIS contacts on under
      www.sec.sisclear.com > SIS Private > Contacts > List of SIS Contacts.




      PG_Kassenobligationen_LNI_E_290508.doc
      Medium-term notes
      29.05.2008 / POA                                                            12/12

								
To top