The European Corporate Actions Committee (ECAC), of which MEFF, the Spanish derivatives exchange, is a member, has added further clarity to the existing guidelines for the treatment of corporate actions on derivative contracts when dividend payments are postponed or cancelled due to the Covid-19 pandemic. In addition to MEFF, ECAC members include Borsa Italiana, Eurex Deutschland, Euronext, ICE Futures Europe and Nasdaq Stockholm.
The guidelines approved at the time provided clarity as to whether derivative contracts would be adjusted in these events of cancellation or shareholder remuneration deferral. Now, the new guidelines will help determine whether the dividend announcement will result in an adjustment to derivative contracts throughout 2022. The events covered by the new guidelines are as follows:
These guidelines are valid until December 31, 2022. After this date, the dividend treatment guidelines for derivative contracts will end due to the Covid-19 pandemic. Dividends announced after this date will be treated in accordance with each Member Market's Corporate Action Policy. To avoid confusion, dividends announced prior to December 31, 2022 but declared ex-dividend as of 2023 will continue to be subject to the above guidelines.
The guidelines set forth in this document are provided for information purposes only and are intended to harmonise adjustment decisions among ECAC Member Markets. The guidelines will not replace the rules set out in the contract’s General Terms and Conditions, which are the only ones binding and decisive for the treatment of any dividends issued by issuers. ECAC members will endeavor to harmonise adjustment decisions where possible, in line with the ECAC Terms of Reference.