About Mandatory or Voluntary Corporate Actions
Eagle's Accounting solution offers you the flexibility to set up corporate actions in either a mandatory or voluntary status because an account or an organization may not elect to participate in an announced corporate action.
About Mandatory Corporate Actions
A mandatory corporate action is one where a response is not required from the shareholder. Examples of mandatory corporate actions include cash dividend, stock dividend, stock splits, reverse stock splits, mergers, calls, name changes, and final factors.
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 using global processing on the ex-date.
For more information, see Manage Mandatory Corporate Action Exclusions.
About Voluntary Corporate Actions
A voluntary corporate action is one where the shareholder has the option to participate. Examples of voluntary corporate actions include stock rights, tender offers, dividend reinvestments, and exchange offers.
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.
Process the voluntary election using global processing on the sweep date/ex-date. Or, for voluntary corporate action elections that use expiry date processing, process the voluntary election using global processing on the expiration date + 1.
For more information, see Manage Voluntary Corporate Action Elections.
Types of Mandatory and Voluntary Corporate Actions
The following list describes the types of corporate actions you can set up and indicates whether you can identify them as mandatory and/or voluntary:
Assimilation (Mandatory)
Calls (Mandatory or Voluntary)
Cash Dividend (Mandatory or Voluntary)
Cash in Lieu (Mandatory or Voluntary)
Cash Tender (Mandatory or Voluntary)
Dividend Reinvestment (Voluntary)
Exchange Offer (Mandatory or Voluntary)
Factors (Mandatory)
Merger (FMV Price) (Mandatory or Voluntary)
Merger (FMV Rate) (Mandatory or Voluntary)
Name Change (Mandatory)
Nominal Value Decrease (Mandatory or Voluntary)
Partial Pre Refunding (Mandatory)
Payment in Kind Bond (Mandatory or Voluntary)
Payment in Kind Preferred (Mandatory or Voluntary)
Principal Repayments (Mandatory or Voluntary)
Puts (Mandatory or Voluntary)
Redenomination of Bonds (Mandatory)
Refund (Mandatory or Voluntary)
Return of Capital (Mandatory or Voluntary)
Rights & Warrants Exercise (Mandatory or Voluntary)
Rights & Warrants Issue (Mandatory or Voluntary)
Rights & Warrants Redemption (Mandatory or Voluntary)
Share/Cash Tender (Mandatory or Voluntary)
Share Offers (Mandatory or Voluntary)
Sink Schedules (Mandatory)
Spin Off (FMV Price) (Mandatory or Voluntary)
Spin Off (FMV Rate) (Mandatory or Voluntary)
Stock Dividend (Mandatory)
Stock Split (Mandatory)
Trains (Mandatory or Voluntary)
Underlying Collateral Coupon Reinvestment (Mandatory)
Unit Separations & Unit Splits (Mandatory or Voluntary)
View Voluntary Corporate Actions
To allow specific accounts to elect whether or not to process a corporate action, the original announcement must be set up with the Mandatory/Voluntary Indicator field set to V. The List Corporate Action Announcement report identifies the Mandatory/Voluntary Indicator field value.
If the voluntary action is processed using the Cash Dividend Processing panel in the Global Processes area, the system will not process the action because the Mandatory/Voluntary Indicator field value is set to V. For a voluntary corporate action to be processed for an eligible account or position, the system requires that a voluntary corporate election is created. All Voluntary Elections attributes can be viewed or maintained through Reference Data Center's Corporate Actions Voluntary Elections panels such as the Add Voluntary Corporate Action Election panel.
In the List Voluntary Corporate Action Election panel, you can query for any voluntary elections that have been linked to a specific account. As with the List Corporate Action Announcement panel, you are only required to enter a date range to query for any voluntary elections. You can enter other field values to more specifically query for the voluntary election you want to look at. Complete the following options in the List Voluntary Corporate Action Election panel.
Option | Description |
|---|---|
Query Flag | Select Effective, Ex, Pay or Sweep Date. |
Entity ID/ Entity Name | Enter the appropriate entity name and ID. |
Asset ID/Issue Name | Enter the appropriate asset ID and issue name. |
Voluntary Corporate Action Begin Date/End Date | Enter the range (both dates can be entered as the same). |
Corporate Action Status | Select a field value of Pending, Released. or Both. |
Corporate Action Reason | Returns the list of codes that are used when original announcements are created. |
CA Election Type | Returns a list of custom codes (no default values) that can classify the type of action. |
After you run a query, the system displays previously created voluntary elections.
The report details show that a voluntary election was set up for the account EAGLE1 for the cash dividend to the security EA_BASE2. The account is also electing to take 100% of the dividend. The voluntary election is in a Released status.
Process Voluntary Corporate Actions
You can process a voluntary corporate action by using the same Global Processing panels as you use for processing mandatory actions.
In Position Viewer, the voluntary action is displayed in the Cost object's Open Adjustment tab.