ACF Academy
Operations and IT Training Training
Category:
 Operations and IT Training
Targeted Audience:
 This course is targeted at an existing securities operations audience, and is designed to introduce that audience to corporate actions.
Prerequisites:
 None
CPE Credits:
 14 hours
Course Level:
 Foundation
 

Fundamentals of Corporate Actions

The principal objectives of this two-day seminar, viewed from an operations perspective, are to:
 
  Become aware of the purpose of equity & debt corporate actions
  Identify the primary categories of corporate action events
  Understand the corporate actions processing lifecycle
  Appreciate the importance of each step in the processing lifecycle
  Understand how to calculate entitlement accurately
  Enable meaningful dialogue with colleagues and clients
  Identify risks and to take appropriate action to mitigate
  Appreciate the many practical difficulties, challenges and risks
   

 
Course Outline
   
 Introduction to Corporate Actions
   
Overview of corporate actions, including:
  • Definition
  • Purpose
  • Linking to trade and position management
Fundamental Concepts:
  • Classification of events
  • Issuer’s objectives
  • How events are initiated
  • Ultimate impact of event
  • Responsibilities of a corporate actions department
  • Major processing steps, major risks
Corporate Actions Lifecycles Overview:
  • Characteristics
  • Similarities and differences of Mandatory events
  • Mandatory with Options events
  • Voluntary events
  • Multi-stage events
  • Issuer Notices
Corporate Action Event Types – an in-depth focus on numerous events, including:
  • Cash Dividends
  • Optional Dividends
  • Dividend Reinvestment Plans
  • Fixed-Rate & Floating-Rate Coupon Payments
  • Bonus Issues
  • Stock Splits & Consolidations
  • Share Buy-Back
  • Odd-Lot Offers
  • Bond Conversions
  • Early/Partial/Voluntary Redemptions
  • Final Maturity
  • Rights Issues
  • Takeovers
Event Type Characteristics, including:
  • How each event type is expressed
  • Whether the event is scheduled or announced by the issuer
  • The issuer’s objective
  • Whether there is a benefit to the holder
  • Whether the event is mandatory or voluntary
  • Effect on the holder’s securities position and on the holder’s cash
Bonus Issue: focusing on blending event terms with securities positions, and calculating resultant securities entitlement utilizing the specified event dates
   
 
   
The Generic (Mandatory Event) Lifecycle
   
A detailed focus on each major step in the mandatory lifecycle, namely:
Declaration of Event Terms
Capturing Event Terms
Ascertaining Entitlement
Informing Relevant Parties
Calculating Resultant Entitlement
Updating Books & Records
Receiving & Crediting Resultant Entitlement
Coupon Payment: focusing on blending event terms with securities positions and calculating resultant cash entitlement utilizing the specified event dates
   
 Tax on Income Events
   
Introduction to tax implications on the payment and receipt of income, including:
  • Withholding tax
  • Domestic tax
  • Internal/external securities position management
  • Over-taxation
  • Tax returns to tax authorities
Cash Dividend: focusing on:
  • Blending event terms with securities positions
  • Calculating cash entitlement using event date
  • Calculating residency-dependent withholding tax
  • Calculating domestic tax.
Mandatory with Options and Voluntary Lifecycle: focus on the features of optional and voluntary events, and associated operational implications, including:
  • Characteristics of Mandatory with Options events
  • Characteristics of Voluntary events
  • Differences versus the mandatory event lifecycle
  • Associated management implications
  • Covering event terms
  • Requesting election decisions
  • Monitoring outstanding election decisions
  • Managing incoming election decisions
  • Issuing outgoing election instructions
  • Calculating resultant entitlement
Rights Issue: focusing on the management of the multiple stages of rights issues, incorporating all the major mandatory/voluntary lifecycle steps, plus nil-paid rights trading and subscription.
 

 

NB All practical sessions are highlighted like this:
means a Workshop or Simulation
means a Case study

 

 
Accreditation


 

"Extremely enjoyable and well taught."

– Ronak P.