The SMART/Track for Corporate Action Liability Notification Service is a web-based system that provides automated communication and tracking of corporate action liability notices for securities undergoing a voluntary corporate action event.

Overview

The SMART/Track for Corporate Action Liability Notification Service is a web-based system that provides automated communication and tracking of corporate action liability notices for securities undergoing a voluntary corporate action event. Participants are able to create, send, process and track broker-to-broker/bank and CNS liability notices easily through the service. Various email notifications are generated automatically when certain activity occurs.

Who Can Use the Service

The service is currently available for use by any existing NSCC clearing firm or DTC settling member.

Benefits

The principal benefits of the system are:

• Reduces the costs and risk associated with manual, paper-based fax and phone notifications.
• Provides an audit trail with a complete record of actions taken regarding a notice, including time, date and the person taking the action. An online archive retains the notices for seven years.
• Reduces message delivery risk through tracking and acknowledgment functionality.

How the Service Works

SMART/Track for Corporate Action Liability Notifications allows users to:

• Create and transmit a notice
• Accept or reject a notice
• View notices they have received or sent
• Cancel a notice within specified time parameters
• Search for active or archived notices using specific field criteria
• Update a notice

Participants can sign-up for SMART/Track for Corporate Action Liability Notifications using the automated registration system.

Creating a Liability Notice
Participants can create broker-to-broker/bank liability notices for securities undergoing a voluntary corporate action event. Participants also use SMART/Track to notify CNS of their intention to participate in a voluntary corporate event for a security that is being processed in CNS.

The user's contact information, which is gathered during the online registration process, is automatically filled in on the input screen. Users can then fill in the remaining fields detailing their liability information.

SMART/Track has a link to DTC’s Reorganization Inquiry for Participants System (RIPS). Once the participant enters the security ID for a broker-to-broker/bank liability notice, all recent offer information on that security will become available from the RIPS database. Users may choose one of the offers in the database or select "Other" and fill in each field manually. If a user selects an offer from the RIPS database, some fields will be automatically populated.

Participants can also add comments or notes regarding a broker-to-broker/bank notice in a free-form field on the create screen.

Participants can create and send a broker-to-broker/bank notice to a single or multiple counterparties up to a maximum of 20. In the case where multiple copies of the notice will be sent out, the information does not have to be recreated for each message.

SMART/Track for Corporate Action Liability Notices reviews the liability data for broker-to-broker/bank and CNS notices to ensure that it is complete and then makes it available to the counterparty indicated or CNS.

Responding to a notice
Participants receiving a broker-to-broker/bank liability notice can either accept or reject the notice. If rejecting a notice, the participant must enter a reason for the reject by selecting a reason from the drop-down box or entering text in the comment box.

Updating a notice
Participants initiating a broker-to-broker corporate action liability notice can reduce the quantity of shares for which it is holding the counterparty liable.

For CNS liability notices, a participant can change any of the fields on the liability notice, except for the security ID field, up until the notice is sent to CNS on the day the notice is created. Participants can reduce the liability quantity the following day up until 12 noon.

Canceling a notice
Participants initiating a broker-to-broker corporate action liability notice can also cancel the notice. The status of the notice changes to indicate that it has been cancelled.

Participants can cancel a CNS liability notice up until the notice is sent to CNS on the day that it is created. The notice can be cancelled the following day up until 12 noon.

Participants can use the free-form field to add comments or notes to the notice being cancelled.

Viewing a notice
The status of all notices can be viewed, and all notices can be searched or sorted using specific field criteria as desired by the user. Participants can view a list of notices that they sent or received as well as the details of specific notices, including the history of each notice with the details of when the action was taken, the date and time that action was taken, and the person that took the action.

Searching for an active or archived notice
Participants can search for active or archived notices within a specific date range. This includes the ability to search for all notices within that range or to search by notice type. Participants can further search within notice type by specific data fields. Notices are automatically archived based on certain date parameters. Archived notices are kept online for seven years.

E-Mail Notifications
SMART/Track generates e-mail notifications to participants for every corporate action liability notice created and transmitted in SMART/Track as well as for every action taken regarding the liability notification. The sender and receiver of corporate action liability notices receive start-of-day e-mails for all notices that are still open and pending action that day (return date, DTC expiration date, or DTC protect date). Intra-day e-mails are sent when the notice is created and transmitted; the liability quantity is reduced; and, the notice is accepted, rejected or cancelled. An e-mail notice is also sent when the expiration date, DTC expiration date, protect expiration date, or DTC protect expiration date for a liability notice associated with a RIPs offer are changed.

For More Information

Please call Relationship Management at 1 888.382.2721.