Modelling an intermediate securities distribution (RHDI)

You can model an intermediate securities distribution as a corporate action of type IntermediateSecuritiesDistributionEvent in LUSID. See all supported corporate actions.

Note the following:

• IntermediateSecuritiesDistributionEvent is valid for instruments of type Equity and SimpleInstrument.

• A rights issue is modelled as a sequence of two separate corporate actions. IntermediateSecuritiesDistributionEvent credits holders with a nil-paid right as an interim security, at no cost. A CallOnIntermediateSecuritiesEvent (EXRI) then resolves that right: the holder either exercises it, paying a subscription price to receive units of the underlying security, or lets it lapse.

• Load IntermediateSecuritiesDistributionEvent against the underlying security. The interim right to be credited is identified by newInstrument on the event. This is the opposite way round to CallOnIntermediateSecuritiesEvent, which you load against the interim right.

• The holding in the underlying security is never debited. This event only adds units of the interim right.

• The entitlement date is the exDate specified when you load IntermediateSecuritiesDistributionEvent, not recordDate.

• Amounts are calculated from the total number of units held on the entitlement date, settled and unsettled.

• The transaction date of automatically-generated output transactions is exDate, and the settlement date is paymentDate.

• There are no elections. Every eligible holder is credited the interim right unconditionally.

Loading IntermediateSecuritiesDistributionEvent

You must load IntermediateSecuritiesDistributionEvent into a corporate action source registered with one or more portfolios. The event then impacts every registered portfolio with a holding in the underlying security. See how to do this.

For more information on fields, see the IntermediateSecuritiesDistributionEvent schema. Where set, the following date validation rules apply:
announcementDate ≤ exDate ≤ recordDate ≤ paymentDate

Only one participation type is valid, and there are no elections to specify:

We recommend setting costFactor to the proportion of the underlying holding's cost basis to allocate onto the new interim right. Set this to 0 if you want the rights credited at zero cost.

Handling fractional entitlements

Where unitsRatio does not divide a portfolio's holding evenly, the entitlement includes a fraction of an interim right. We recommend always setting fractionalUnitsCashPrice and fractionalUnitsCashCurrency, and fractionalUnitsRoundingConvention to control how LUSID resolves it:

Note: The fractionalUnitsRoundingConvention field is shared with other corporate actions and accepts a wider set of values. Only Floor and BuyUp have an outcome for this event.

Configuring the economic impact

You must create the following transaction types to handle automatically-generated output transactions. They are not provided for you.

You can give a transaction type any economic impact you like. Our recommendations:

• On the units leg, add the units of the interim right at a cost of zero.

• On the cash-in-lieu leg, remove the fractional unit and add the cash proceeds. Where the right was credited at zero cost, the whole of the cash received realises as a gain on ProfitAndLoss/Realised/Market.

• On the buy-up leg, add the units at the fractional unit price and remove the cash that funded them. This is a purchase, establishing a cost basis, so there should be a ProfitAndLoss/Unrealised/Market impact.

Reference examples

A rights issue with no fractional entitlement

Holders receive one nil-paid right for every four shares held. costFactor, fractionalUnitsCashPrice and fractionalUnitsCashCurrency are all supplied even though this ratio produces no fraction for a holding that is a multiple of four.

[
  {
    "instrumentEventId": "RHDI-ACMECORP-2026",
    "instrumentIdentifiers": {
      "Instrument/default/ClientInternal": "ACMECORP-EQ"
    },
    "description": "Intermediate securities distribution - Acme Corp (1 right per 4 shares)",
    "participationType": "Mandatory",
    "instrumentEvent": {
      "instrumentEventType": "IntermediateSecuritiesDistributionEvent",
      "exDate": "2026-08-15T00:00:00.0000000+00:00",
      "paymentDate": "2026-08-20T00:00:00.0000000+00:00",
      "newInstrument": {
        "instrumentIdentifiers": {
          "Instrument/default/ClientInternal": "ACMECORP-RIGHTS"
        }
      },
      "unitsRatio": { "input": 4, "output": 1 },
      "costFactor": 0,
      "fractionalUnitsCashPrice": 0,
      "fractionalUnitsCashCurrency": "GBP"
    }
  }
]

A portfolio holding 4,000 units of Acme Corp on 15 August 2026 is credited 1,000 nil-paid rights at a total consideration of zero, settling on 20 August 2026. Its 4,000-unit holding in Acme Corp is unaffected.

A rights issue where the fraction is paid as cash

The same terms, but a fractional entitlement is valued at 0.80 GBP per right and paid out as cash under the default Floor convention.

[
  {
    "instrumentEventId": "RHDI-ACMECORP-2026-FLOOR",
    "instrumentIdentifiers": {
      "Instrument/default/ClientInternal": "ACMECORP-EQ"
    },
    "description": "Intermediate securities distribution - Acme Corp (fraction paid as cash)",
    "participationType": "Mandatory",
    "instrumentEvent": {
      "instrumentEventType": "IntermediateSecuritiesDistributionEvent",
      "exDate": "2026-08-15T00:00:00.0000000+00:00",
      "paymentDate": "2026-08-20T00:00:00.0000000+00:00",
      "newInstrument": {
        "instrumentIdentifiers": {
          "Instrument/default/ClientInternal": "ACMECORP-RIGHTS"
        }
      },
      "unitsRatio": { "input": 4, "output": 1 },
      "costFactor": 0,
      "fractionalUnitsCashPrice": 0.80,
      "fractionalUnitsCashCurrency": "GBP",
      "fractionalUnitsRoundingConvention": "Floor"
    }
  }
]

A portfolio holding 4,002 units of Acme Corp on 15 August 2026 has an entitlement of 1,000.5 rights. It keeps 1,000 nil-paid rights and receives 0.40 GBP for the remaining half right, settling on 20 August 2026.

A rights issue where the fraction is bought up

The same terms again, but the BuyUp convention rounds a fractional entitlement up to the next whole right instead of paying it out.

[
  {
    "instrumentEventId": "RHDI-ACMECORP-2026-BUYUP",
    "instrumentIdentifiers": {
      "Instrument/default/ClientInternal": "ACMECORP-EQ"
    },
    "description": "Intermediate securities distribution - Acme Corp (fraction bought up)",
    "participationType": "Mandatory",
    "instrumentEvent": {
      "instrumentEventType": "IntermediateSecuritiesDistributionEvent",
      "exDate": "2026-08-15T00:00:00.0000000+00:00",
      "paymentDate": "2026-08-20T00:00:00.0000000+00:00",
      "newInstrument": {
        "instrumentIdentifiers": {
          "Instrument/default/ClientInternal": "ACMECORP-RIGHTS"
        }
      },
      "unitsRatio": { "input": 4, "output": 1 },
      "costFactor": 0,
      "fractionalUnitsCashPrice": 0.80,
      "fractionalUnitsCashCurrency": "GBP",
      "fractionalUnitsRoundingConvention": "BuyUp"
    }
  }
]

A portfolio holding 4,002 units of Acme Corp on 15 August 2026 has an entitlement of 1,000.5 rights. It is credited 1,001 nil-paid rights and pays 0.40 GBP for the half right it bought up, settling on 20 August 2026.