Investment Operations

Corporate Actions Advanced

Categories Operations

Course Instructor

Course Level

Intermediate

Certification

8.0 CPE Credits

Delivery

Via Zoom

Hours (EST)

9:00pm - 1:00pm​

Description

*This course can also be offered upon request and can be customized to fit your team’s needs.

Date: November 19-20

The Corporate Actions Advanced virtual course is targeting an existing corporate action audience and is designed to develop their understanding to the next level.  The course addresses two challenging aspects of corporate actions processing, namely:

  1. the complex end of corporate action events (e.g. Impact of Corporate Actions on Option Contracts, and Bond Tender Offers), and
  2. trading strategies (e.g. short selling, and securities lending & borrowing) which have an impact on corporate actions.

During this course, you will:

  1. Become familiar with a variety of challenging corporate action events
  2. Become familiar with trading strategies & operational actions that have a demanding impact on corporate action processing
  3. Raise awareness of the possibility that the details of some corporate action events can change during the event
  4. Appreciate the risks and associated controls employed in the processing of a range of challenging corporate action events
  5. Emphasize the need for complete internal control when processing more complex corporate action events

Prerequisite: Attendee must have completed the Corporate Actions Fundamentals course or have experience in the corporate actions arena

Who Should Attend

  1. Corporate actions personnel
  2. Reconciliation staff
  3. Custody professionals
  4. Risk professionals
  5. Accounting personnel

Day 1

Failed Trades & Partially Settled Trades

  1. Definition of failed trades
  2. Description of partially settled trades
  3. Treatment of fails in a corporate action

Short Selling

  1. Definition
  2. Purpose
  3. Overview of hedge funds & prime brokers
  4. Treatment of short sales in a corporate action

Securities Lending

  1. Definition
  2. Purpose
  3. Benefit to Lender
  4. Ownership of Lent Securities
  5. Lending Methods
  6. Impact on Corporate Actions

Securities Borrowing

  1. Definition
  2. Purpose
  3. Reasons for Borrowing
  4. Ownership of Borrowed Securities
  5. Borrowing Methods
  6. Impact on Corporate Actions

Special-Cum and Special-Ex Trading

  1. Definition
  2. How Such Trades are Identified
  3. Impact on Corporate Actions

Australian Dividend Tax

  1. Definition of Withholding Tax
  2. When Withholding Tax is Charged
  3. Treaty and Non-Treaty Rates
  4. How Correct Tax Rates are Applied
  5. Withholding Tax in Australia

Depositary Receipt Issuance Fees

  1. Definition of ADRs
  2. ADR creation
  3. Benefits of ADRs
  4. Definition of Issuance Fees
  5. When Issuance Fees are Charged

UK Stamp Duty (on New Stock)

  1. Definition of Stamp Duty
  2. Why Charged
  3. When Charged for Trading
  4. When Charged on Corporate Actions

Day 2

Warrant Exercise

  1. Description of Warrants
  2. Call Warrants & Put Warrants
  3. Single Stock Warrants & Index Warrants
  4. Exercise Procedures
  5. Maintaining Internal Control

Impact of Corporate Actions on Option Contracts

  1. Description of Put/Call Options
  2. Open & Closed Option Transactions
  3. Covered & Naked Option Positions
  4. Option Exercises and Assignments
  5. Impact of Pro-Rata & Non-Pro-Rata Events
  6. Examples: Stock Splits, Bonus Issues
  7. Examples: Reverse Splits, Rights Issues

Accelerated Rights Issues

  1. Introduction to ARI (RAPIDs)
  2. Characteristics vs Conventional Rights Issues
  3. Advantages/Disadvantages
  4. Issue Stages & Sequence
  5. Treatment of Unsubscribed Shares (Bookbuild)
  6. Result of Bookbuild

Rights Issues with Preferential Subscription Rights

  1. Definition of Preferential Subscription Rights
  2. Characteristics of Irreducible Offer
  3. Characteristics of Reducible Offer
  4. Advantages/Disadvantages
  5. Issue Stages & Sequence

Financial Restructuring (Bonds & Equity)

  1. Definition of Financial Restructuring
  2. Purpose of Exchange Offers
  3. Analysis of Offer Involving Debt & Equity
  4. Response Deadlines
  5. Fixed-Price versus Fixed-Spread Offers
  6. Participation Procedure Options
  7. Definition of Exchangeable Bonds

Share Capital Decrease

  1. Definition of Issued Share Capital
  2. Issuer’s Purpose
  3. Capital Decrease with Capital Repayment
  4. Capital Decrease without Capital Repayment
  5. Full versus Partial Share Quantity
  6. Impact on Share Par Value

Interest on Equity Capital

  1. Definition of Interest on Equity Capital
  2. Issuer’s Purpose
  3. Initial Rate per Share
  4. Restated Rate per Share
  5. Withholding Tax Implications

Mortgage-Backed Securities: Interest & Capital

  1. Definition of MBS
  2. Scheduled Income & Capital Cashflows
  3. Prepayment
  4. Pool Factors
  5. Impact of Prepayment on Income & Capital

Bond Tender Offers

  • Definition of Bond Tender Offer
  • Event Announcement & Conditions
  • Treatment of Offer in Various Scenarios
    1. Buy Settled Before Record Date
    2. Repo Outstanding Beyond Record Date
    3. Sec’ Loan Outstanding Beyond Record Date
    4. Collateral Outstanding Beyond Record Date

Summary & Questions

In-House Training

Custom Training can help you achieve your corporate training goals while staying on budget and focusing the content on the needs of your group. Email your questions regarding corporate training to training@investmentoperations.net.

2024 Training Calendar

Training Catalogue

Course Instructor

Course Level

Intermediate

Certification

8.0 CPE Credits

Delivery

Via Zoom

Hours (EST)

9:00pm - 1:00pm​

Description

*This course can also be offered upon request and can be customized to fit your team’s needs.

Date: November 19-20

The Corporate Actions Advanced virtual course is targeting an existing corporate action audience and is designed to develop their understanding to the next level.  The course addresses two challenging aspects of corporate actions processing, namely:

  1. the complex end of corporate action events (e.g. Impact of Corporate Actions on Option Contracts, and Bond Tender Offers), and
  2. trading strategies (e.g. short selling, and securities lending & borrowing) which have an impact on corporate actions.

During this course, you will:

  1. Become familiar with a variety of challenging corporate action events
  2. Become familiar with trading strategies & operational actions that have a demanding impact on corporate action processing
  3. Raise awareness of the possibility that the details of some corporate action events can change during the event
  4. Appreciate the risks and associated controls employed in the processing of a range of challenging corporate action events
  5. Emphasize the need for complete internal control when processing more complex corporate action events

Prerequisite: Attendee must have completed the Corporate Actions Fundamentals course or have experience in the corporate actions arena

Who Should Attend

  1. Corporate actions personnel
  2. Reconciliation staff
  3. Custody professionals
  4. Risk professionals
  5. Accounting personnel

Day 1

Failed Trades & Partially Settled Trades

  1. Definition of failed trades
  2. Description of partially settled trades
  3. Treatment of fails in a corporate action

Short Selling

  1. Definition
  2. Purpose
  3. Overview of hedge funds & prime brokers
  4. Treatment of short sales in a corporate action

Securities Lending

  1. Definition
  2. Purpose
  3. Benefit to Lender
  4. Ownership of Lent Securities
  5. Lending Methods
  6. Impact on Corporate Actions

Securities Borrowing

  1. Definition
  2. Purpose
  3. Reasons for Borrowing
  4. Ownership of Borrowed Securities
  5. Borrowing Methods
  6. Impact on Corporate Actions

Special-Cum and Special-Ex Trading

  1. Definition
  2. How Such Trades are Identified
  3. Impact on Corporate Actions

Australian Dividend Tax

  1. Definition of Withholding Tax
  2. When Withholding Tax is Charged
  3. Treaty and Non-Treaty Rates
  4. How Correct Tax Rates are Applied
  5. Withholding Tax in Australia

Depositary Receipt Issuance Fees

  1. Definition of ADRs
  2. ADR creation
  3. Benefits of ADRs
  4. Definition of Issuance Fees
  5. When Issuance Fees are Charged

UK Stamp Duty (on New Stock)

  1. Definition of Stamp Duty
  2. Why Charged
  3. When Charged for Trading
  4. When Charged on Corporate Actions

Day 2

Warrant Exercise

  1. Description of Warrants
  2. Call Warrants & Put Warrants
  3. Single Stock Warrants & Index Warrants
  4. Exercise Procedures
  5. Maintaining Internal Control

Impact of Corporate Actions on Option Contracts

  1. Description of Put/Call Options
  2. Open & Closed Option Transactions
  3. Covered & Naked Option Positions
  4. Option Exercises and Assignments
  5. Impact of Pro-Rata & Non-Pro-Rata Events
  6. Examples: Stock Splits, Bonus Issues
  7. Examples: Reverse Splits, Rights Issues

Accelerated Rights Issues

  1. Introduction to ARI (RAPIDs)
  2. Characteristics vs Conventional Rights Issues
  3. Advantages/Disadvantages
  4. Issue Stages & Sequence
  5. Treatment of Unsubscribed Shares (Bookbuild)
  6. Result of Bookbuild

Rights Issues with Preferential Subscription Rights

  1. Definition of Preferential Subscription Rights
  2. Characteristics of Irreducible Offer
  3. Characteristics of Reducible Offer
  4. Advantages/Disadvantages
  5. Issue Stages & Sequence

Financial Restructuring (Bonds & Equity)

  1. Definition of Financial Restructuring
  2. Purpose of Exchange Offers
  3. Analysis of Offer Involving Debt & Equity
  4. Response Deadlines
  5. Fixed-Price versus Fixed-Spread Offers
  6. Participation Procedure Options
  7. Definition of Exchangeable Bonds

Share Capital Decrease

  1. Definition of Issued Share Capital
  2. Issuer’s Purpose
  3. Capital Decrease with Capital Repayment
  4. Capital Decrease without Capital Repayment
  5. Full versus Partial Share Quantity
  6. Impact on Share Par Value

Interest on Equity Capital

  1. Definition of Interest on Equity Capital
  2. Issuer’s Purpose
  3. Initial Rate per Share
  4. Restated Rate per Share
  5. Withholding Tax Implications

Mortgage-Backed Securities: Interest & Capital

  1. Definition of MBS
  2. Scheduled Income & Capital Cashflows
  3. Prepayment
  4. Pool Factors
  5. Impact of Prepayment on Income & Capital

Bond Tender Offers

  • Definition of Bond Tender Offer
  • Event Announcement & Conditions
  • Treatment of Offer in Various Scenarios
    1. Buy Settled Before Record Date
    2. Repo Outstanding Beyond Record Date
    3. Sec’ Loan Outstanding Beyond Record Date
    4. Collateral Outstanding Beyond Record Date

Summary & Questions

In-House Training

Custom Training can help you achieve your corporate training goals while staying on budget and focusing the content on the needs of your group. Email your questions regarding corporate training to training@investmentoperations.net.

2024 Training Calendar

Training Catalogue

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