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| Corporate Action Announcement Type | Definition |
|---|---|
| Assimilation | The completed distribution of a new securities issue to the public. |
| Calls/Puts/Refunds | A bond that can be redeemed by the issuer prior to its maturity. |
| Cash Dividend | A payment of cash in the same company. |
| Cash in Lieu | Payments made to investors who received fractional shares as a consequence of stock splits, corporate mergers, and reorganizations. |
| Cash Tender | To surrender shares in return for cash payment. |
| Dividend Reinvestment | The option to reinvest the original cash dividend to purchase additional shares of the same company. |
| Dividend Reinvestment Position Percentage | Allows you to make a fund election that will support any DRIP corporate action notification and not require an election. |
| Exchange Offer | An offer by a firm to its shareholders to exchange one security into a fixed number of shares of common stock or other debt security. |
| Final Factor | The process of repaying a portion of an outstanding loan balance. |
| Merger (FMV Price) | The business valuation that focuses on a company's net asset value, or the fair-market value of its total assets minus its total liabilities |
| Merger (FMV Rate) | The Fair Market Value rate. |
| Name Change | Change in security reference data such as a security identifier and/or security description. |
| Nominal Value Decrease | Nominal value changes with compensation are the reduction of cost basis. |
| Partial Pre Refunding | Issuing a longer maturity bond in order to pay off an earlier bond to take advantage of a drop in interest rates. |
| Payment in Kind Bond | A type of bond that pays interest in additional bonds rather than in cash. |
| Payment in Kind Preferred | A dividend payment in the form of additional shares. |
| Redenomination of Bonds | Converting of quantity and par amount of all debt securities |
| Return of Capitol | A return from an investment that is not considered income. The return of capital is when some or all of the money an investor has in an investment is paid back to him or her, thus decreasing the value of the investment. |
| Rights/Warrants Exercise | A right is a privilege allowing existing shareholders to buy shares of an issue of common stock shortly before it is offered to the public, at a specified (usually discounted) price in proportion to the number of shares already owned. A warrant is a certificate, usually issued along with a bond or preferred stock, entitling the holder to buy a specific amount of securities at a specific price, usually above the current market price at the time of issuance, for an extended period. In the case that the price of the security rises to above that of the warrant's exercise price, the investor can buy the security at the warrant's exercise price and resell it for a profit. Otherwise, the warrant will expire or remain unused. Warrants are listed on options exchanges and trade independently of the securities with which they are issued. |
| Share Offer | To purchase shares in the same or different company. |
| Share/Cash Tender | To surrender shares in return for shares and/or cash of the same or different company. |
| Sink Schedule | A means of repaying funds that were borrowed through a bond issue. |
| Spin Off FMV Price | A spin off FMV price occurs when a company distributes part of its assets to form a new publicly traded company. |
| Spin Off FMV Rate | A spin off FMV rate occurs when a company distributes part of its assets to form a new publicly traded company. |
| Stock Dividend | A stock dividend is a payment of additional shares in the same company. |
| Stock Split | A stock split increases the number of shares in the same company. |
| Trains | A basket of investment grade bonds. Of a bond falls out of the investment grade category, it is either liquidated from the trust, or delivered to the investor. |
| Underlying Collateral Coupon Reinvestment | The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. |
| Unit Separations/Unit Splits | The separation of two securities in which more than one class of securities is traded together. A unit is usually comprised of a warrant and another debt security. Cost is allocated from the old security to the new security, and interest is distributed from the old debt security to the new debt security. |
Mandatory Corporate Actions
Mandatory Actions are non-voluntary actions in which holders of the debt instrument have no choice but to accept the action set upon them by the issuer. Mandatory corporate actions involve a two-step process:
- Create the announcement for the corporate action record with the Mandatory/Voluntary Indicator field set to Mandatory.
- Process the corporate action in the Global process Center on the ex-date.
Voluntary Corporate Actions
A voluntary corporate action is one where the shareholder has the option to participate in the action or not. Voluntary corporate actions also involve a two-step process:
- Create the announcement for the corporate action record with the Mandatory/Voluntary Indicator field set to Voluntary.
- Once the record is in the system, you must elect to participate in the action using the Add Voluntary Corporate Election option.
Processing Corporate Actions
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