Question ID: 6
Regulation Reference: Guidelines on submission of information to NCAs (Preparatory phase)
Article: N/A
Status: Final
Date of submission: 09 Jan 2015
Question
1. The Final Report's Technical Annex V: Complementary Identification Code (
CIC) Table makes no mention of matured securities. Should all matured securities (options, warrants, rights, futures, certificates, and all fixed income securities) be considered delisted and thus have a CIC starting with XL or should matured securities continue to be represented by the country code applicable prior to maturity? Example cases:
IT0004854888 is a matured sovereign.
CH0026985082 is past maturity, but still trades as it is in default
2. The same Table defines the country code as "the country ISO code where the asset is listed in." ISIN BBG003FBSDY6 is an example of an Australian issuer's bond purchased by an Australian insurer in the Australian OTC market. If the insurer values this bond in AU$, and the bond is listed only in Frankfurt, should the bond still return a CIC country code of DE or should the country of valuation take precedence and return AU?
3. How should a service provider represent the CIC of an equity in a market where the equity is locally delisted, but active elsewhere? Should the CIC return the XL country code or should it default to the primary exchange of the equity in another market? For example, IBM is delisted in Canada but is active and liquid in NY. Where requested with an identifier unique to Canada, should the returned code start with XL, US, or something else?
EIOPA answer
Q1: As long as the security keeps being listed, a country ISO can be used. Additionally, securities that matured before the reporting reference date, they should not be in the undertaking's portfolio, unless an event like default has occurred, where for example a redemption agreement is established between the issuer and the investors and consequently the security keeps being listed and possibly traded.
It should also be noted that the reference date for attributing the CIC to a security is the timeframe until the reporting reference date. In the sovereign example provided, at the end of quarter 3 2013, that bond was still alive and listed, so it should have a country ISO.
Q2: If the asset is listed in more than one country, the country shall be the one of the most liquid regulated market. This definition is no longer linked to the references used for the valuation.
Q3: It should start with US, as that is the most liquid stock exchange. XL is only used when a security is not listed anywhere. From a service provider's perspective, the country ISO to use as default could be the primary exchange.