The following is taken from Manual, para. STSM031140.

Arrangements are sometimes made to pay for shares which are to be delivered to a depositary-receipt issuer or clearance service (or their respective nominees) in periodic instalments, typically under an agreement between the seller, the purchaser and a custodian bank.

Under the terms of the agreement:

the shares are registered in the name of the custodian bank;

letters of acceptance set out the purchaser’s rights and obligations in relation to the shares (‘interim rights’);

the letters of acceptance are renounceable within a limited period (‘renunciation period’);

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