ICMSA Bulletin 240516/64 – Procedure applicable to Eurobonds to be issued by Icelandic issuers as stand-alone or drawdown of a programme

It was recently identified that two clarifications were needed regarding the Icelandic Eurobonds tax procedures. The two clarifications are:

1. The RSK exemption letter is not required for securities issued by the Central Bank of Iceland.

2. For all other issuances, a RSK exemption letter is required, and must also be obtained for each security issued under a programme.

Further information is available on the Icelandic Tax Authorities website, ISIN exemptions | Skatturinn – skattar og gjöld

ICSDs’ joint bulletin re eligibility criteria for tax information upon securities acceptance

Background

A few years ago, the implementation of the EU Prospectus Regulation led to a reduction in tax information in issuers’ documentation, which created some difficulties in properly assessing the eligibility criteria upon securities acceptance and the applicable tax treatment.

Upon request from some market stakeholders (i.e., Issuer’s Agents and Common Depositories) to the ICMSA, both ICSDs agreed to issue this joint bulletin as a practical guidance, regarding the required tax information, which Issuers, Issuers’ Agents and Common Depositories must provide to the International Central Securities Depositories (ICSDs), Euroclear Bank and Clearstream Banking S.A., upon securities acceptance.

ICMSA submission to EBA Consultation Paper

The ICMSA have submitted a response (drafted by Catriona Lloyd of Dentons UK & Middle East LLP on behalf of the ICMSA) to the European Banking Authority’s draft consultation paper EBA/CP/203/07 on the EBA Guidelines on the Assessment of Adequate Knowledge and Experience of the Management or Administrative Organ of Credit Servicers, as a whole, under the Credit Servicers Directive (the “Directive”).

While the draft consultation paper was concerned with a specific issue as regards credit servicing, the ICMSA response took the opportunity to reiterate its more general concern (which the FMLC and the LMA have also raised on various occasions) in relation to the definitions of “credit servicer” and “credit servicing” being so broad under the Directive as, potentially, to cover activities which a facility agent or security agent could carry out, even though facility agents and security agents would not generally consider themselves as “credit servicers” when applying the ordinary meaning of that term.

The ICMSA response requested that the EBA provide guidance that facility agents and security agents are not “credit servicers” subject to the obligations that apply to credit servicers under the Directive.

ICMSA Bulletin 220922/62 – Guide to the Treatment of Financial Instrument Fungibility and Related Conditions (where the ICSDs act as the Issuer CSD)

The purpose of this document is to provide guidance to market participants on fungibility scenarios that can be supported by Euroclear Bank and Clearstream Banking Luxembourg (respectively the “ICSDs”) in respect of requests to treat and handle fungibility between separate tranches of a financial instrument. This has been triggered by scenarios presented to the ICSDs that could not be supported due to the operational complexities that were associated with handling the requests.