Issued Share Rights can now be processed automatically from The Corporate Actions screen in Simple Fund 360 removing many of the friction points associated with Rights processing.
How to process a rights issue is dependent on the scenario, whether the rights are renounceable or non-renounceable and the course of action undertaken by the SMSF.
Renounceable rights generally offer the SMSF three options on what to do with the rights. They can act on the rights, sell the rights on market or let the rights lapse. Renounceable rights are in contrast to non-renounceable rights, which cannot be sold on market or transferred.
Processing of these rights is a two-step process in Simple Fund 360.
- Process the creation of the Renounceable or Non-Renounceable Rights account for the fund;
- Process the exercising/sale/lapse of the Rights.
Both of these steps can be processed through the Corporate Actions screen.
Share Rights Scenarios
Select one of the following links below for your fund's scenario:
Share Rights FAQs
- If I have previously created the Rights account for the fund and input the number of Rights held as a manual journal, can I record the exercising/sale/lapse via the Corporate Actions screen?
No. Both steps for a Renounceable or Non-Renounceable Rights Issue will need to be recorded via the Corporate Actions screen. If one step is manually recorded, you can either remove the original manual transaction or process the second stage of the Rights Issue manually.
- How do I record TFN withholding tax for Retail Premiums?
At this stage TFN withholding tax cannot be recorded during the processing of a Share Right. It can be recorded manually post processing in the Transaction List as a separate transaction.
- How do I record GST and/or Brokerage?
Brokerage and GST are not supported in phase 1 of the Share Rights feature. To include brokerage/GST the transactions will need to be processed manually. Refer to Options and Rights (Manual).
- Why is the Ignore button greyed out and not able to be selected for the Exercising/Lapsed Rights option in the Corporate Actions screen?
Where the issuing of Rights has been recorded for a fund via the Corporate Actions screen, the exercising option cannot be ignored and must either be exercised/lapsed or sold (for Renounceable Rights) through the Corporate Actions screen.
- What if the Retail Premium is treated as a capital gain?
Process the Premium using the Capital Gain option instead of the Income option.
- Can I match any payments/income/proceeds to the bank account via a data feed?
Bank transactions can be matched either via the Transaction Matching screen or manually via the Transaction List. If a Rights payment/premium is received on the same day/day after the corporate action date the bank transaction will auto match. For three days or more, the bank transaction will present as a Suggestion in the Matching screen.
For manual matching, in the Transaction List look for the two entries (Rights and Bank), select each entry and then select Match.
- When selecting the Rights account, do all securities end with an "R"?
Majority of Rights accounts end with the letter "R" (for example NABR.AX).