This article teaches you how to create a range of different Corporate Actions manually:

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

• Buy Back
• Capital Call 
• Capital Return
• Code Change
• Rights Exercise
• Rights Lapse
• Spin off or Demerger
• Split or Consolidation
• Takeover or Merger

Buy Back

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

A buy-back is an offer a company makes to shareholders to buy-back some of its shares from investors either off-market or on-market.

Navigate to Fund Level > Transactions > Investment - Corporate Action > Buy Back

Enter data into all the mandatory fields of the screen as indicated below.

1. Enter Investment Account
2. Enter Book Close Date
3. Enter Effective Date
4. Enter Payment Date
5. Enter Participating Quantity
6. Enter various components as required
   
   
7. Click Submit to complete the transaction.

Capital Call 

A capital call will increase the cost base of an Investment. 

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

Navigate to Fund Level > Transactions > Investment - Corporate action > Capital call.

1. Enter Investment Account
2. Enter Call Date
3. Enter Payment Date
4. Enter Call Amount
5. Enter Participating Quantity
6. Enter Description
   
   
   
   
7. Click the Submit button to complete the transaction
   

Capital Return

 A Capital Return will reduce the cost base of the investment.

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

Navigate to Fund Level > Transactions > Investment - Corporate action > Capital return

1. Enter Holding account (Select from Search Fields)
2. Enter Recorded Date
3. Enter Participating Quantity
4. Select Payment Currency
5. Enter Payment Amount
   
   
   
6. Click Submit

 If the Capital Return relates to a managed fund, then the amount should be processed via Distribution - Cash and then classified as a Capital Return in the Distribution - Tax Statement event.

Code Change

A code change will change the investment code to a new code and migrate the historical cost base details to the new security code.

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

Navigate to Fund Level > Transactions > Investment - Corporate Action > Code Change

1. Enter Source Investment Account
2. Enter Target Investment Account
3. Enter Action Date
4. Enter Description
   
   
   
   
5. Click Submit button to complete the transaction.

Rights Exercise  

This is a two-step process, firstly create the rights with the quantities the entity is entitled to receive then exercise the rights.

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

Navigate to Fund Level > Transactions > Investment - Corporate Action > Rights Exercise/Lapse

1. Enter Details 
2. Click Update Parcelling
3. Update Exercised Quantity 
4. Enter Payment/Premium
5. Update Quantity Received
6. Click Update Details
   
   
   
   
7. Click Submit
   

Rights Lapse

This is a two-step process, firstly create the rights with the quantities the entity is entitled to receive then lapse the rights.

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

Navigate to Fund Level > Transactions > Investment - Corporate Action > Rights Exercise/Lapse

1. Enter Details 
2. Update Parcelling
3. Update Lapsed Quantity
4. Update Lapsed Payment/Premium
5. Update Details
   
   
   
   
6. Click Submit

Spin off or Demerger

This event is used where a new holding is split out of an existing holding.

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

Navigate to Fund Level > Transactions > Investment - Corporate action > Spin Off of Demerger 

1. Select Holding Source account, and enter Balance Date, Date of Spin off, Description, Holding Account, Target Quantity, Demerger tax Eligibility and Percentage of Source
2. Update Parcelling
3. Update Results
4. Submit

In the example above,

• target book cost is calculated as percentage of source * source book cost = 5.2% * $10,000 = $520
• target unadjusted tax cost is calculated as percentage of source * source unadjusted tax cost = 5.2% * 10,000 = $520

The percentage of source applies to both the accounting cost and unadjusted tax cost. Unadjusted tax cost is the cost base for CGT purposes before applying any cost base adjustments. This number can be different from accounting book cost if the investment has gone through transitional CGT relief.

Split or Consolidation

A split "increase in units" or consolidation "decrease in units".

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

Navigate to Fund Level > Transactions > Investment - Corporate action > Split or consolidation

1. Enter the data into the numbered fields as per below screenshot.
   
   
2. Click the Submit button to complete the transaction.

Takeover or Merger

A Takeover or Merger event involves a new holding replacing an existing holding.

Before creating a Corporate Action manually you should always check the Corporate Actions Console at Fund Level or Business Level to see if it exists and can be processed automatically from there.

Navigate to Fund Level > Transactions > Investment - Corporate action > Takeover or merger. 

1. Enter all data fields as per screenshot below.
2. Click on Update Parcelling to update the parcels "you need this to be able to proceed with corporate action".
3. Select With Rollover Relief or Without Rollover Relief "See Notes below for definition"
4. Submit to complete the transaction.

With Rollover Relief: The rollover allows you to defer paying CGT until a later CGT event happens (for example you later dispose of the shares you acquired in the takeover). The rollover relief doesn't apply if the parcel will make a capital loss.

Without Rollover Relief: When this option is chosen, the system will realise the capital gain or loss as a result of the transaction. The shares you receive in exchange for the takeover/merger event is taken to be acquired on the Action Date at the market value of those shares on the Action Date. 

What's Next?

We will teach you the difference between using or not using rollover relief for a Takeover or Merger corporate action here; Processing Scrip for Scrip Rollover Relief.

For worked examples see:

• Takeover/Merger - A Worked Example
• How to Process a Rights Issue in Class