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Corporate Actions – Major Types

A key distinction needs to be made between corporate actions that are mandatory or compulsory and those that are voluntary or non-mandatory. From the point of view of stakeholders or investors, the distinction is important because mandatory events require no action on their behalf. Voluntary corporate actions, on the other hand, are those where investors opt to participate in the event or not. From the point of view of custodians and other participants involved in the corporate actions processing chain, the distinction is important because voluntary actions are generally more complex and hence involve greater risk. To complicate things even further, there are also a number of mandatory actions with options, where investors are required to make a choice among some alternatives offered to them as part of a mandatory corporate action.

 

This course looks at the main types of corporate action – mandatory, voluntary, and mandatory with options. Examples of each are provided, with the focus on the most popular events in the corporate actions marketplace.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Describe the main corporate action events, including mandatory actions, mandatory actions with options, and voluntary actions

  • COURSE OUTLINE

    Topic 1: Mandatory Corporate Actions

    Dividend and Interest Payments

    o Dividends

    o Scrip Dividends

    o Dividend Payment Procedures

    o Interest Payments

    o Interest Payment Procedures

    o Dividend and Interest Payments – Custodial Actions

    Stock Splits and Reverse Splits

    Mergers and Acquisitions

    Spinoffs/Demergers

    Redemptions

    Scrip Issues

    Other Mandatory Actions

    o Initial Public Offerings (IPOs)

    o Name Changes

    o Return of Capital

    o Bankruptcy

    o Delistings

    Topic 2: Voluntary Corporate Actions

    Rights Issues

    Tender Offers

    Conversions

    Share Buybacks

    Proxy Voting

    Other Voluntary Actions

    o Entitlement Issues (Open Offers)

    o Exercise of Warrants

    o Class Actions

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    60 Minutes

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