Namechange

General

The Company decides to change its own name or that of its issued securities from the current name to a new name.

The issuing company changes its name. The event shows the change from the old name to a new name

Longer Description from the point of view of different market participants

The Issuer will have to announce its plans to change the name of the Company or for any of the Securities it is issuing and make it a voting point in the AGM.

Needs to amend their records so that the name change is reflected.

The Agent Bank will have to set up an Event in the systems of the (I)CSD and the numbering Agencies so that the Name Change can be processed and communicated down the industry chain.

Numbering Agencies need to update the name of the security on the correct date. The Name Change should take effect on the Effective Date of the Event.

The Exchanges on which the security is listed need to update the name of the security on the correct date. The Name Change should take effect on the Effective Date of the Event.

The Indices that have included the security need to update the name of the security on the correct date. The Name Change should take effect on the Effective Date of the Event.

At CSD level, Messaging is initiated and sent down the chain. This event does not involve Stock or Cash Transactions. Static Data will have to be updated.

At Custodian level Messaging is received and ingested and in turn new messaging is generated and sent further down the chain. This event does not involve Stock or Cash Transactions. Static Data will have to be updated.

At BrokerDealer level Messaging is received and ingested and in turn new messaging is generated and sent further down the chain. This event does not involve Stock or Cash Transactions. Static Data will have to be updated.

If the stock is on loan or held as collateral, then both the stock lending brokers (or all 3 if it’s 3rd-party lending) and collateral agents need to amend the name of the stock in their databases on the Effective Date of the Event.

Fund Manager need to update their systems with the new name of the security on the Effective Date of the Event.

Fund Manager need to update their systems with the new name of the security on the Effective Date of the Event.

Vendors will have to update their systems with the New Name of the Security on the Effective Date and send messaging to their clients about it.

    • At Retail Bank level the messaging is received and ingested and needs to be forwarded to the Beneficial Owners. The Retail Bank’s own systems need to be updated and show the change as per the Effective Date of the Event.
    • When the beneficial owner holds the securities through for example a Fund or an ETF, then the Retail Bank does in that case not need to take action on the event (it’s part of the fund manager’s tasks)

The Beneficial Owner needs to approve the Name Change on the AGM and should take note of the changes as per the Effective Date of the  Event.

Background

In some countries a Name Change is seen as a Corporate Actions Event, whereas in others (France for example) the event is seen as a Static Data update or as “Information” to shareholders. However, in reality this type of information is relayed to shareholders through Swift Corporate Action Messaging, so the Qualifier 22F CAEV = CHAN with an additional 22F Field of CHAN/NAME is used.

    • One of the main reasons for Company Name Changes is Mergers and Acquisitions that take place. When two companies become one, they have to adopt one of the old names, combine the two or develop a new name.
    • Times change and business names change with them – meaning that whenever a company recognises that the landscape of the industry changes it might have to change its core business and with it its name
    • A Change of Name might be part of a change in Corporate Branding Strategy. For Example a company might decide to compete on the lowest price in the industry and change their name to a name that highlights good value for money.
    • Sometimes names could be much easier and consumer friendly (especially for internationally expanding companies where language barriers might cause problems).
    • Company names are subject to fashion and might therefore have to be changed. Think for example of the dot.com bubble. After the bubble burst, many companies changed their name to names less associated with the digital hype. In more recent years there has been a tendency to “become more Green” which has been reflected in the names of several companies around the world.

Other Aspects of a Name Change event.

Swift categorises the a Name Change Event as a General Event that is covered by the general Event Type CHAN. Typically a GENERAL Event (22F CAEP = GENL) is used whereby the 22F CAEV qualifier is CHAN whereby an additional 22F Field is used with tag “CHAN/NAME”. The old name is included in the 16R USECU block and the New Name is included in the CADTL block whereby a 70E field is inserted containing the new name of the company.

SMPG does not designate the Name Change event as a separate Event Type in their CA Event Types Template Grid. Typically a GENERAL ANNOUNCEMENT Event is used whereby one of the qualifiers (CAEV) is CHAN.

  • Company to adopt a strategy to which defines its core business and to choose the correct name for it as part of their Overall Branding Strategy (often based on advice from management consultants, Branding Consultants, its own shareholders and industry experts). Often extensive research will have to be carried out as to how suggested new names appeal to customers before the final new name is chosen.
  • Company to check the availability of the new name with the Companies House Register (in the UK)
  • Company to prepare minutes and resolutions of a director’s meeting recommending the name change to the members of the company.
  • Company to put the proposed name change as a voting point on the agenda of the AGM / EGM. 
  • The proposed company name change is a special resolution. This means that 75% of those shareholders that are entitled to vote should vote in favour of the resolution. Under circumstances that there is no AGM / EGM scheduled in the near future, a written resolution (representing not less than 75% of the total voting rights of eligible shares) suffices.
  • Company’s Share Register, the (I)CSD and all other parties holding the security change the name in their records and pass the information on to their clients.
  • Company to submit the Companies House Form NM01 for the notice of the change.
  • Company to register the name as a registered trademark if and when required
    • Announcement Date
    • Effective Date
  • With a Name Change Event there are no transactions (neither cash nor stock) so there will not be any claims or transformations.
    • Note; there are exceptions to this in cases where the company changes its name along with their security identifier. In those cases there will be debits and credits of stock involved and therefore also Transformations.

There’s no ratio involved in a Name Change Event so there will also be no fractions.

Famous Examples

  • Apple Computers changed its name to Apple Inc. (reason was that they would no longer focus on selling computers only, but also on mobile phones, Ipods, Ipads, apps etc. – in other words, the landscape of their industry changed, what they regarded as their core business changed and so they changed their name along with it.
  • Daimler-Benz and Chrysler once were separate companies. When they merged they decided to combine the names of both old companies to one new one: DaimlerChrysler. They then demerged again and the name was changed to Daimler AG.
  • Yahoo started out in 1994 as “Jerry and David’s Guide to the World Wide Web,” a list of websites organized by category put together by Stanford graduate school students Jerry Yang and David Filo. Yang and Filo quickly changed the site’s name to “Yahoo” (in nerd fashion, they joked that Yahoo stood for “Yet Another Hierarchical Officious Oracle”). Yahoo (YHOO) officially incorporated on March 2, 1995.

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