Effective July 1, 2009, CDS Clearing and Depository Services
Inc. (CDS) is requiring all issuers that use the
book-entry-only (BEO) services1
provided by CDS to enter into a new agreement (the BEO
Securities Services Agreement) with CDS to make BEO issues
eligible for deposit at CDS and to maintain the eligibility of
securities of an issuer for BEO services. This requirement applies
to both new issuers and to BEO issuers who have an existing
agreement with CDS (i.e. a letter of representations, blanket
letter of representation, or memorandum of understanding). If
applicable, the BEO Securities Services Agreement replaces these
agreements delivered by the BEO issuer or its predecessors prior to
July 1, 2009. It is a standard form agreement and no amendments are
permitted by the BEO issuer.
The BEO Securities Services Agreement, along with the Issuer
Procedures to the BEO Securities Services Agreement (the
Issuer Procedures), set out the provisions by
which CDS will hold securities in its nominee name. They also
provide CDS with a means to replace a lost or stolen BEO global
certificate without purchasing a bond of indemnity, and ensure
entitlements are distributed to participants on payment date with
payments received by CDS electronically and in same day final
funds. For existing BEO issuers, they apply to each previously
issued BEO security or its predecessors delivered to CDS.
All global certificates issued by a BEO issuer shall bear a
prescribed legend which states that such certificates have been
issued according to the BEO Securities Services Agreement. This
change to the legend may require the board of directors of the BEO
issuer to approve a new form of security certificate prior to
issuing securities post-July 1, 2009. Moreover, according to the
BEO Securities Services Agreement, CDS reserves the right to refuse
to accept any issues of securities as eligible for deposit at CDS,
to determine that specific issues of securities at CDS be made
ineligible for deposit at CDS as BEO securities, and to request the
withdrawal of specific securities that CDS has determined are no
longer eligible at CDS as BEO securities.
Once the BEO Securities Services Agreement is signed and
accepted by CDS, it is kept on file by CDS for all future BEO
issues by the BEO issuer. However, a completed BEO
Acknowledgment in the requisite form must be filed and
delivered each time the BEO issuer makes a deposit of securities
with CDS. Each BEO Acknowledgment must be delivered at least two
days prior to the closing for each specific issue of
1.A BEO issue is one where the entire issue is registered
in CDS's nominee name (CDS & Co.) on the register of the
issuer and is deposited with CDS for the life of the issue.
Physical certificates are not available to beneficial holders for
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On Thursday, September 22, 2016, Dentons hosted a panel discussion about the management of liabilities and risks associated with environmental crises, including potential liabilities for directors and officers and provided insight into risk and liability techniques associated with environmental crisis management.
The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).