Corporate Actions - A Concise Guide

Jacket text for Corporate Actions - A Concise Guide

Corporate actions have been sidelined for too long and deserve to be treated with more respect. No type of investment security can be fully understood without knowledge of its corporate actions. All corporate actions have implications for the sustainability of an investment's performance but repeatedly more beguiling investment preoccupations put them into the shade.

The corporate actions processing industry is in deeper shadow than the actions themselves. Together with bank clearing and exchange settlement systems, the administration of corporate actions is one of the key co-operative functions tying our highly competitive global finance industry together. In the financial markets of the developed world the efficiency and "risklessness" of corporate actions processing is entirely taken for granted. Yet the volume of complex corporate actions and a common sense estimate of the likelihood of mistakes occurring suggest that industry practitioners and investing clients may be deluding themselves.

If knowledge of corporate actions brings us to fully understand the securities they relate to, some familiarity with corporate actions processing is important in gaining an insight into the workings of the securities industry as a system. With the exceptions of accountancy and financial regulation, no other activity involves as many kinds of investment industry participant as corporate actions processing.

The current state of corporate actions underscores the incompleteness of the globalisation of financial markets. The corporate actions industry is global in the sense that the corporate actions for any tradable security, from wherever it originates, will be processed, if, in some cases, only after a fashion. The relegation of corporate action processing to obscurity is one factor in disguising the host of cultural, ethical and regulatory differences that distinguish securities markets from one another. These differences in the detail are woven into much cross-border corporate actions processing. Although we may be on the brink of an unparalleled extension of the world’s developed economies, understanding of the entitlements of shareholders (domestic and overseas) in the newly developed countries is long way behind other features of globalisation.

A look at corporate actions at this time will give food for thought in several directions. As the financial institutions take stock, re-examining their points of reference, it will be interesting to see whether corporate action entitlements receive more of the limelight than they have up until now. The corporate actions industry needs to improve its efficiency: what needs to change and will the major players be able or willing to put up the investment necessary for this? As the balance of economic power shifts eastwards, what kind of corporate actions environment will investors meet with when they invest outside their own region? In sum, a better acquaintance with the current state of corporate actions will allow a greater understanding of changes in the securities industry.

Chapter headings for Corporate Actions - A Concise Guide

Preface
Introduction
Quick Guide to Locating Information on Specific Corporate Actions

1. Defining Corporate Actions
2. The Main Corporate Actions
3. The Corporate Actions Process
4. The Corporate Actions Industry
5. How Well is the Corporate Actions System Working?
6. Corporate Actions; Technology and the Future
7. Corporate Actions Wreaking Change on Shares
8. Shareholder Voting
9. Corporate Actions and Taxation
10. Corporate Actions in Different Jurisdictions
11. Corporate Actions for Debt Securities
12. Corporate Action Effects Across the Investing Spectrum
13. Conclusion

Glossary
Appendices
- List of Central Securities Depositories
- Capital Gains Tax Example – BIFFA/Severn Trent
- Non-rights Issues of Shares

Suggested Reading
Index

About Francis Groves

Francis Groves studied modern history at the London School of Economics and has many years of experience working for legal and financial publishers including, Reuters, the Financial Times and Butterworths. He has written on overseas property investment and created financial literacy training materials. The interaction of politics and finance is a particular interest for him. Francis continues to enjoy reading history. Other spare time pursuits include walking and exploring new walks.

More about Francis Groves