Corporate action events
CERT: Non-US TEFRA D Certification
Written and maintained by ZagTrader. Last reviewed . How this page is sourced and checked
CERT asks holders of a bond issued under the US TEFRA D rules to certify that the beneficial owners are not US persons, so that their interest in a temporary global note can be exchanged into the permanent global note.
- Code
- CERT
- Usually announced as
- CHOS
What CERT means
Bearer bonds sold outside the United States under the TEFRA D rules start life as a temporary global note. Before an investor’s holding can move into the permanent global note, the owner has to confirm that it is not a US person (or is an allowed exception). The CERT event collects those certifications.
Certification usually runs through the clearing system: holders certify to their custodian, custodians to the CSD or ICSD, and the ICSD to the issuer’s agent. Holdings that are not certified stay in the temporary note, and payments on them can be held back until certification is given.
When you see it
- An MT564 with
:22F::CAEV//CERTand:22F::CAMV//CHOS. The SMPG grid lists the optionsQINV(certify as qualified investor, here non-US) andNOQU(not qualified). Expect a certification deadline (:98a::CERT) and the exchange date. Common on new Eurobond issues held at the ICSDs. - The later exchange of the temporary note into the permanent note can be announced as a change, CHAN with
:22F::CHAN//GTGP(global temporary to global permanent). Withholding tax certification for a lower tax rate is a different event, WTRC.
What to do next
- Find out which beneficial owners are non-US and instruct with an MT565 using
QINVfor the certified quantity before the deadline. Keep the client certificates as evidence; they may be requested later. - Uncertified positions stay blocked from exchange and may have payments held back. Chase missing certifications and check the MT567 status replies.