Corporate Action Statuses
When you use the system to set up announcements, one of the required fields is the Corporate Action Status field. This field allows you to make changes/modifications to an announcement before final processing, which is on ex-date. Or for voluntary corporate action elections that use expiry date processing, and process on expiration date +1, you can make changes/modifications to the announcement before final processing, which occurs on expiration date +1.
If you set up an announcement before the ex-date of the action, you should set the Status field to a value of Pending or Incomplete. If the announcement remains in this status until ex-date, the system does not process the underlying action to any held positions of the security. You must ensure that before ex-date, you modify the status of each impending action to Released. Once an action is in Released status, on ex-date, the system processes the announcement action against the underlying security after being requested through the Global Process workspace.
The same applies to elections that use expiry date processing. If you set up an announcement before the expiration date + 1 of the action, you should set the Status field to a value of Pending or Incomplete. If the announcement remains in this status until expiration date +1, the system does not process the underlying action to any held positions of the security. You must ensure that before expiration date +1, you modify the status of each impending action to Released. Once an action is in Released status, on expiration date +1, the system processes the announcement action against the underlying security after being requested through the Global Process workspace.
Cancels
Any processed (Released) corporate action can be globally cancelled, if necessary, across all entities. This is also a two-step process where a cancel corporate action announcement is set up against the original released processed announcement. The cancel announcement then needs to be run as a separate global event through the Global Process workspace.
A released cancel corporate action announcement processed globally is updated to a Completed status. If you attempt to process a completed action again, the Completed status prevents the rollback/replay of the originally cancelled corporate action announcement.
Priorities
You can rank corporate actions occurring on the same security on the same ex-date. The Corporate Action Sub Priority field resides on all reference related corporate action panels. The system uses the value entered in this field to prioritize which event to process first, second, and so on. For example, if McDonald's were to undergo a stock split with a Sub Priority of 1 and a cash dividend with a sub priority of 2, the system automatically processes the stock split first, and then the cash dividend based on the modified quantity after the split is processed.
If, in this example, the Corporate Action Sub Priority field value for both events (on the same ex-date) is set to 1, the system processes the actions in the order that they were originally set up in the database. For example, if the cash dividend record was set up first followed by the stock split, both a sub priority of 1, the system processes the cash dividend first, and then processes the split.
Types
The system allows the processing of all types of corporate actions, from cash and stock dividends and stock splits for equity securities, to factors, calls, cash tender and sinks for fixed income, as well as name/identifier changes for all securities.
Most corporate action announcements have an action specific panel for entering the corporate action data and a corresponding event specific global process panel for processing the entitlement. The panels are designed to include only those fields that are specific to the announcement you are entering. For example, the Create Cash Dividend panel has a field to add the dividend rate. This field is not found on the Create Name Change panel, as it is not required for that action.
For corporate action announcements that are similar in nature and require similar data values to be entered, these corporate actions are grouped in a single reference data and event panel. For example, calls, puts, and refunds are transactions that are similar in nature and require the same type of information to be entered and processed. There are not three separate panels to handle each of these announcements, but a single panel where all three can be processed. This panel is called Create Calls/Put/Refund. Accordingly, in the Global Processing panels, there is one panel used to run the global event used to process these three entitlements, as well as cash tenders.