Process Voluntary Corporate Actions based on Expiry Date
- Nancy Cohn (Deactivated)
- Kinga Huszno
Eagle Accounting allows you to use expiry date processing to process voluntary corporate actions based on expiration date +1. You can specify an expiration date for a voluntary corporate action announcement and then process a voluntary corporate action election based on that expiration date. Otherwise, Eagle Accounting processes all voluntary corporate actions based on the ex-date, or sweep date.Â
Before you can process voluntary corporate actions on expiry date, you must identify the entities that use expiry date processing, define the expiry date for each corporate action announcement that uses expiry date processing, and identify the voluntary corporate action elections that use expiry date processing.Â
You can use expiry date processing in conjunction with voluntary restriction processing. When you book a voluntary corporate action election, Eagle Accounting can automatically add restrictions on shares and then have the system automatically lift the restrictions when it processes the corporate action. You can also create voluntary corporate action elections with data that is not finalized. Unfinalized data in this case refers to rates, dates, and/or a security ID that is not available or is likely to change. As a result, you can book a corporate action before the data is finalized and the system can restrict you from selling those shares. For details, see Restrict Shares When Booking Voluntary Corporate Actions.
Set Up Entities
You can set the Expiry Date Processing (tag 12877) option at the entity level to a value of Yes or No to indicate whether an entity or master fund allows you to process voluntary corporate actions based on expiration date. A definition follows.
Option | Tag | Description |
|---|---|---|
Expiry Date Processing | 12877 | Indicates whether the entity allows you to process voluntary corporate actions based on expiration date. You can override this value at the voluntary corporate action election level. Options include:Â
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For general information about setting up entities and master funds, see Create Entities and Manage Mutual Funds. Or see Create/Edit Entity Panel Options and Create Master Fund Panel Options.
Create a Corporate Action AnnouncementÂ
You can define the expiry date when you create a corporate action announcement. For general information about creating and modifying corporate action announcements, see Manage Corporate Action Announcements.Â
A definition of the fields related to expiry date processing follows. The Expiry Date field is available on each corporate action announcement panel that is eligible for voluntary elections.
Option | Tag | Description |
|---|---|---|
Expiry Date | 12876 | Specifies the expiration date of voluntary corporate actions associated with the announcement. For entities that use expiry date processing, the system can process voluntary corporate actions based on expiration date +1. The system can sweep corporate actions in a Released status using the announcement's expiry date for voluntary elections that use expiry date processing. During global processing, expiration date +1 serves as the sweep date in place of the announcement's Sweep Date value. |
Add Voluntary Corporate Action Elections
You can specify at the voluntary corporate action election level whether the voluntary election for an entity uses expiry date processing. You can add a voluntary election for corporate actions in a Pending or a Released status.
When you add a voluntary corporate action election that you plan to process on expiry date, the Add Entity Election Detail panel shows the following related fields. If you want the voluntary election to use expiry date processing, ensure that the Expiry Date Processing field has a value of Yes, and that the Expiry Date field displays the expiry date specified for the corporate action announcement. For general information about adding a voluntary corporate action election, see Add Voluntary Corporate Action Elections.
Option | Tag | Description |
|---|---|---|
Expiry Date Processing | 12877 | Indicates whether the selected voluntary corporate action election allows processing based on expiration date. This field value initially indicates whether the selected entity allows you to process voluntary corporate actions based on expiration date. You can retain that value or you can override the entity's value at the voluntary corporate action election level. When you set up an entity as eligible or ineligible for expiry date processing, you have the option for some voluntary elections for the entity to use expiry date processing and other voluntary elections for the entity to use ex-date processing instead. Options include:Â
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Expiry Date | 12876 | Displays the expiration date of voluntary corporate actions associated with the selected announcement. This field appears if the Expiry Date Processing field has a value of Yes. For entities that use expiry date processing, the system can process voluntary corporate actions based on expiration date +1. |
Modify a Corporate Action Announcement after the Expiry Date Changes
If the expiration date changes for a voluntary corporate action that has a Pending status, you can modify the Expiry Date field value for the corporate action announcement. You can use the Modify Corporate Action Announcement panel to edit the corporate action announcement.
However, if the expiration date changes for a voluntary corporate action that has a Released status, then you must cancel and rebook the corporate action to reflect the new expiration date. Or, you can create a second corporate action announcement with the new expiration date and then add new voluntary elections for those entities that did not previously elect to opt in on the corporate action. However, remember that Eagle Accounting allows only 1 voluntary election per entity per corporate action.Â
Process Corporate Actions on Expiry Date + 1
After you identify the voluntary corporate action elections that use expiry date processing, you can use global processing for corporate actions as usual. When you use expiry date processing, expiration date +1 acts as the sweep date.Â
In the corporate action global processing panels, when you define a Corporate Action Begin Sweep Date and a Corporate Action End Sweep Date, the system uses the voluntary corporate action's Expiry Date to determine the sweep date for voluntary corporate action elections that use expiry date processing. For corporate actions in a Released status, the system sweeps the corporate action on expiration date + 1 using the expiry date.Â
Cancel and Rebook Corporate Actions after the Expiry Date Changes
If the expiration date changes for a voluntary corporate action that has a Released status, then you must cancel and rebook the corporate action announcement to reflect the new expiration date. You can use the Rebook Corporate Action option for that purpose.
Alternately, you can create a second corporate action announcement with the new expiration date and then add new voluntary elections for those entities that did not previously elect to opt in on the corporate action. However, remember that Eagle Accounting allows only one voluntary election per entity per corporate action.Â
In the following example, assume you are cancelling a corporate action in a scenario where one entity previously processed the corporate action and another entity did not yet process the corporate action.Â
For the entity that already processed the corporate action, after you add the cancel corporate action to Eagle Accounting, you then need to trigger it using the global query. For example, in Accounting Center's Global Processes, you can use the Cancel Global Corporate Action Announcements option. This query updates the entity, reverses ledger entries made, inserts cancel rows, and restores the Cost, Cash, and Income objects so that they no longer reflect the corporate action.
For the entity that did not yet process the corporate action, you have no further tasks to perform. If you rebook the corporate action, then the entity needs to re-enter the voluntary election to reference the new corporate action record. The system links the old voluntary election to the cancelled corporate action record and does not trigger the processing of the new corporate action.
Report on Expiry Date Processing
The Corporate Action Entitlement report allows you to show corporate actions processed based on expiration date +1. You can run the report for all entities that hold a particular security. You can set the report's Report Type option to Expiry Date +1 to include corporate actions associated with entities that can process voluntary corporate actions based on expiration date +1 during a period of one or more days. The report results include the Expiry Date +1, identifying the expiration date of the voluntary corporate action election. They also show the entity's Expiry Date Processing setting. For more information, see Corporate Action Entitlement Report.