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Corporate Actions: A Guide to Securities Event Management

Corporate Actions: A Guide to Securities Event Management

Michael Simmons, Elaine Dalgleish

ISBN: 978-1-118-67345-4

Apr 2013

428 pages

Description

Corporate actions are events that affect large corporations through to the individual investor - even those that own a single-share! All organizations that hold equity and debt securities for themselves and/or on behalf of others are affected when the issuer of a security announces an income or corporate action event. The successful management of the array of different event types requires understanding of the inherent risks, and tight controls at critical points in the event lifecycle. The management of income and corporate action events are important and essential parts of the securities industry business. Written by authors with many years experience within this sector, Corporate Actions: A Guide to Securities Event Management sets out to demystify the subject and provides a thorough, step-by-step introduction to corporate actions and income events.

Corporate Actions is a comprehensive source for understanding a major component of operational processing. The individual components and their relation to each other within the corporate actions lifecycle are explained in detail, through which the reader will gain a clear and thorough understanding of the lifecycle together with potential processing risks and the strategies to mitigate

Corporate Actions is essential reading for all those involved in the securities industry, from new recruits to those involved in both the day-to-day operations process and those within executive management. It will also prove invaluable to those providing consultancy and software solutions to the securities industry.

Corporate Actions is the first major work on this subject. Many people within the securities industry have heard of corporate actions - many people know they can be highly risky - many organizations have lost vast sums of cash in attempting to process them - very few understand them!

Introduction xvii

Acknowledgements xxi

About the Authors xxiii

PART I INTRODUCTORY ELEMENTS 1

1 Basic Corporate Action Concepts 3

2 Event Description and Classification 9

3 The Securities (and Corporate Actions) Market Place 23

4 Static Data 37

5 Securities Position Management 49

PART II MANDATORY EVENTS 57

6 Overview of the Generic Corporate Action Lifecycle 59

7 Straight Through Processing 63

8 Event Terms Capture and Cleansing 67

9 Determining Entitlement 79

10 Communication of Event Information 113

11 Calculation of Resultant Entitlements 123

12 Passing of Internal Entries 139

13 Collection/Disbursement of Resultant Entitlements 151

14 Updating of Internal Entries 161

15 Examples of Mandatory Events 167

PART III EVENTS WITH ELECTIONS 185

16 Concepts of Events with Elections 187

17 Management of Mandatory with Options Events 193

18 Management of Voluntary Events 219

PART IV MULTI-STAGE EVENTS 233

19 Concepts of Multi-Stage Events 235

20 Management of a Rights Issue 247

21 Example of a Rights Issue 261

22 Concepts of Takeover Events 275

23 Management of Takeover Events 285

PART V TAXATION 299

24 Concepts and Management of Taxation 301

25 Management of Income Tax 307

PART VI ISSUER NOTICES 331

26 Concepts and Management of Issuer Notices 333

PART VII OBJECTIVES AND INITIATIVES 341

27 Objectives and Initiatives 343

Glossary of Terms 353

Index 383