Restrict Shares When Booking Voluntary Corporate Actions
- Nancy Cohn (Deactivated)
- Kinga Huszno
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 the system processes the corporate action. This process is called voluntary restriction processing.
When you use voluntary restriction processing, as soon as you book the voluntary election, Eagle Accounting uses pledging to restrict shares of the parent security that elect to participate in a corporate action. For entities set up to use expiration date +1 processing for voluntary elections, the system processes the corporate action once you reach the expiration date +1 and the corporate action is in a Released status. Then the system release the shares and no longer restricts them. Because this process is automated, Eagle users have no tasks to perform manually. For entities that do not use expiration date + 1 processing, but process based on ex-date/sweep date, and automatically process restrictions, the system lifts the restriction on ex-date.
You can process voluntary corporate actions based on data that is not finalized. You can set up voluntary corporate actions with a Pending status with data that is not finalized, such as dates, rates, and security IDs. After the finalized dates, rates, and security IDs become available, you can update/release the corporate action and allow Eagle Accounting to process those adjustments.Â
Set Up Entities
You can set up the following two options for each entity or master fund that automatically processes restrictions/pledges on voluntary corporate actions.Â
Option | Tag | Description |
|---|---|---|
Voluntary Restriction Processing | 16658 | Indicates whether the entity automatically processes restrictions/pledges on voluntary corporate actions. Options include:Â
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Release Proration Pledge | 16865 | If the entity uses voluntary restriction processing for corporate actions, indicates whether the entity automatically releases shares originally elected or automatically releases just the shares processed, if the corporate action was prorated. That is, if you apply a Proration Percent (tag 8081) value to the announcement and use voluntary restriction processing for voluntary elections, this option affects whether the system releases the prorated amount of the pledge or the entire pledge amount. Options include:Â
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For general information about setting up options for entities and master funds, see Create/Edit Entity Panel Options and Create Master Fund Panel Options.
Set Up Pledging
Eagle clients that use voluntary restriction processing use it in conjunction with Eagle's ability to pledge securities. Eagle supports pledging/restricting securities from sale, which can assist you with collateral management. Pledging a full or partial position prevents that quantity from being sold off.Â
The tasks you perform to set up pledging are not described in this document. You can find the panels used to manually set up and manage pledges in Accounting Center > Transactions > Custody.
Create a Corporate Action Announcement with Unfinalized Data
You can create a corporate action announcement that is voluntary for use with voluntary restriction processing. For general information about creating various types of corporate action announcements, see Manage Corporate Action Announcements.Â
If you want to set up the corporate action announcement with data that is not final, you can create a corporate action announcement with a Pending status, modify the announcement when the data finalizes, and then change the corporate action announcement status to Released. For example, if the security ID, dates, and/or rates are not initially available, you can provide preliminary information when you create the corporate action announcement and the voluntary corporate action election. So long as you set the corporate action announcement status to Pending, Eagle Accounting does not process the voluntary corporate actions.Â
Add Voluntary Corporate Action Elections
You can add a voluntary corporate action election for a corporate action announcement that has a Pending status or a Released status. When you select the Add Voluntary Corporate Action Election option to add a voluntary corporate action election, the Add Entity Election Detail panel allows you to define the following fields related to voluntary restriction processing. For general information on adding a voluntary corporate action election, see Add Voluntary Corporate Action Elections.
When you book a voluntary corporate action election by submitting the Add Voluntary Corporate Action Election panel manually or running that process automatically for an entity that uses voluntary restriction processing, Eagle Accounting runs the pledging process automatically behind the scenes. It restricts shares of the parent security that elected to participate in the corporate action as soon as you book the voluntary election.Â
Option | Tag | Description |
|---|---|---|
Voluntary Restriction Processing | 16658 | Displays whether the selected entity automatically processes restrictions/pledges on voluntary corporate actions. When you add a voluntary corporate action election for an entity with the Voluntary Restriction Processing option set to Yes, Eagle Accounting uses the pledging process to restrict the shares elected on the voluntary election Options include
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Elected Shares | 316 | Specifies the number of shares participating in the voluntary corporate action for the entity. If you specify the elected shares, the system calculates the Elected Shares Percent value for you. |
Elected Shares Percent | 1001 | Specifies the percent of shares participating in the voluntary corporate action for the entity. If you specify the elected shares percent, the system calculates the Elected Shares value for you. If the entity's Voluntary Restriction Processing (tag 16658) field has a value of Yes, the Elected Shares Percent field does not appear. If the voluntary election uses voluntary restriction processing, you can enter only shares for the voluntary election and cannot enter a percent of shares. |
Modify a Corporate Action Announcement after Data Finalizes
You can use the Modify Corporate Action Announcement panel to edit a corporate action announcement with unfinalized data. If you initially created the corporate action announcement with data that was not final and you assigned that corporate action announcement a Pending status, when the data becomes final, you can modify the announcement with the finalized data, such as rates, dates, and security ID. You can also change the corporate action announcement status to Released.
For example, if the security ID, dates, and/or rates were initially available, you can modify the announcement to reflect the final security ID, dates, and rates. You can also change the corporate action announcement status to Released, allowing Eagle Accounting to process the voluntary corporate actions.Â
Once you set the corporate action to a Released status and process it, any further changes to the corporate action require cancelling and rebooking the corporate action.
If you use expiry date processing, for additional information about managing changes to the expiration date, see Process Voluntary Corporate Actions based on Expiry Date.
Process Corporate Actions
When you booked the voluntary corporate action election in Eagle Accounting, the system placed a restriction on the shares.Â
Then, once the corporate action reaches the sweep date (ex-date or expiration date +1, as appropriate) and the corporate action has a Released status, Eagle Accounting processes the corporate action. In addition, for voluntary elections that use voluntary restriction processing, as part of restriction processing, the system releases the shares and no longer restricts the shares. The system removes the restriction/pledge.