Corporate action events
CLSA: Class Action/Proposed Settlement
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CLSA announces a class action or a proposed settlement in which investors who held or traded a security during a given period may claim compensation for losses. Eligible holders decide whether to file a claim, object or do nothing.
- Code
- CLSA
- Usually announced as
- VOLU (CHOS also allowed)
What CLSA means
When investors lose money because of an issuer’s misstatement or misconduct, a court case may be brought on behalf of a whole class of investors, most often in the United States. If the case ends in a settlement, the defendants pay into a fund that is shared among the investors who file valid claims.
Eligibility depends on trading history, not on a record date holding: typically on purchases and sales during a class period. Investors may need to provide full transaction records. Payments can arrive years after the claim is filed, and the amount depends on how many claims are made.
When you see it
- An MT564 with
:22F::CAEV//CLSA, normally:22F::CAMV//VOLU. The SMPG grid lists optionsCONY(join or accept),ABSTandNOAC, notes that abstaining is the default, and says the account owner does not always have to respond through the account servicer: it may deal directly with the claims administrator or legal representatives. The grid also allows CHOS. - Dates specific to class actions are available: the lead plaintiff deadline (
:98a::PLDT), the filing date (:98a::FILL) and the court hearing date (:98a::HEAR), together with the class period. In ISO 20022 a class action number can be given inCorpActnGnlInf/ClssActnNb.
What to do next
- Check whether the client traded the security during the class period, not only whether it holds it today. Former holders may also be eligible.
- Decide who files: the custodian on the client’s behalf (instruct with an MT565 before the deadline) or the client directly through the claims administrator. Keep the transaction evidence used for the claim.
- Track the claim for the long term. When a payment finally arrives, match it to the original event reference and client allocation.