A corporate action announcement is security reference data that provides relevant and available data and financial information about a security's corporate action. It also includes information that the system uses to determine if and when the announcement is eligible for processing.
When adding a corporate action manually, you must indicate whether it is a mandatory or voluntary corporate action. 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 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
| 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 Fair Market Value price. |
| 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 | |
| Rights/Warrants Exercise | |
| Rights/Warrants Redemption | |
| 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 | |
| Spin Off FMV Rate | |
| 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. |
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