Corporate Actions. A Guide to Securities Event Management. The Wiley Finance Series

  • ID: 2217208
  • Book
  • 428 Pages
  • John Wiley and Sons Ltd
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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!

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Introduction xvii

Acknowledgements xxi

About the Authors xxiii


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


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


16 Concepts of Events with Elections 187

17 Management of Mandatory with Options Events 193

18 Management of Voluntary Events 219


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


24 Concepts and Management of Taxation 301

25 Management of Income Tax 307


26 Concepts and Management of Issuer Notices 333


27 Objectives and Initiatives 343

Glossary of Terms 353

Index 383

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MICHAEL SIMMONS has spent the majority of his working life within the operational areas of international investment banks, most notably within the S.G. Warburg group in London. Having gained a detailed understanding of various back office tasks through many years of hands–on experience, he assumed managerial responsibility for a number of operational areas.

In recent years, Michael has worked as head of business consultancy within a global computing services firm, and is now an independent analyst and trainer. Michael s areas of expertise include all aspects of the fixed income and equity trade lifecycle and related activities, including operational risks and controls. Recent assignments include the offshoring of operational activities to India and operational risk analysis (the Sarbanes Oxley act). In addition, he creates and delivers training courses on the workings of the securities industry and associated operational aspects to audiences around the world.

Michael is author of Securities Operations: A Guide to Trade and Position Management published by John Wiley & Sons, which describes the fundamental components of operational activities from a first–principles perspective.

ELAINE DALGLEISH has spent her working life within the operational areas of investment banking and stock broking, working directly for international banking firms and financial software providers. Elaine s hands–on experience spans various middle and back office operational disciplines in multiple markets. Whilst working directly in investment banking and stock broking, this has ultimately included the managerial responsibility for a number of operational areas.
The focal point of Elaine s working history is the consistent involvement with Corporate Actions operations, initially with the manual processing of events as a custodian, and subsequently working as a Senior Business Analyst, specialising in Corporate Actions, analysing client requirements, and consulting in process re–engineering for Tier 1 and 2 investment banks.
As a consequence, Elaine has both observed and been directly involved in the evolution of global market practices of Corporate Actions operations and the move to automation. 

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