Modelling a call on intermediate securities (EXRI)

You can model a call on intermediate securities as a corporate action of type CallOnIntermediateSecuritiesEvent in LUSID. See all supported corporate actions.

Note the following:

CallOnIntermediateSecuritiesEvent is valid for instruments of type Equity and SimpleInstrument.
A rights issue is modelled as a sequence of two separate corporate actions. An IntermediateSecuritiesDistributionEvent (RHDI) credits holders with a nil-paid right as an interim security. CallOnIntermediateSecuritiesEvent 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 CallOnIntermediateSecuritiesEvent against the interim right, not against the underlying security. The security to be delivered on exercise is identified by newInstrument on the event.
Whichever outcome resolves, the interim right is always removed from the portfolio in full on the expiryDate. Only the exercise outcome additionally credits new units.
The entitlement date is the expiryDate specified when you load CallOnIntermediateSecuritiesEvent.
Amounts are calculated from the number of settled units of the interim right held on the entitlement date. Unsettled units are not eligible.
The transaction date of automatically-generated output transactions is expiryDate, as is the settlement date of the transaction removing the interim right. The settlement date of the transaction crediting new units is paymentDate.

Loading `CallOnIntermediateSecuritiesEvent`

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

For more information on fields, see the CallOnIntermediateSecuritiesEvent schema. Where set, the following date validation rules apply:
expiryDate ≤ paymentDate

Only one participation type is valid, and you must specify both elections:

Participation type	Election(s)	Election choices	Further action required?
`MandatoryWithChoices`	Exactly two elections, supplied together: One `OptionExerciseElection`, and one `LapseElection`. Both are mandatory. An event carrying only one of the two is rejected.	Across the pair of elections: Exactly one must be ✅ Is default. At most one may be ✅ Is chosen If neither is, the default election applies.	❓Optional. The Is chosen or Is default election occurs unless you instruct to take a different election per portfolio.

Participation type

Election(s)

Election choices

Further action required?

MandatoryWithChoices

Exactly two elections, supplied together:

One OptionExerciseElection, and
one LapseElection.

Both are mandatory. An event carrying only one of the two is rejected.

Across the pair of elections:

Exactly one must be
✅ Is default.
At most one may be
✅ Is chosen
If neither is, the default election applies.

❓Optional. The Is chosen or Is default election occurs unless you instruct to take a different election per portfolio.

Note that neither election type has an Is declared option; only Is chosen and Is default apply.

Requiring both elections on every event is stricter than most other corporate actions, where a lapse election is optional. It means the terms of the alternative are always recorded alongside the terms of the exercise, so a portfolio can be instructed either way after the event is loaded.

Note: CallOnIntermediateSecuritiesEvent has no oversubscription election. Support is planned for a future release.

Instructing to take a different election per portfolio

You can instruct a particular portfolio to take the election other than the chosen one. If you do not, the portfolio takes the chosen election, or the default election where none is chosen.

To do this, load an event instruction into a portfolio. Note this is not an event, and you do not load it into a corporate action source, which means you can instruct differently in different portfolios. See how to do this.

Configuring the economic impact

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

Transaction type	Implement the transaction type if…	Intended economic impact
ExerciseIntermediateSecurities	The chosen election is `OptionExerciseElection`.	Adds units of `newInstrument` at the subscription price, and removes the cash that funded them.
ExpireIntermediateSecurities	Always. This transaction is generated whichever election resolves.	Removes the interim right at a total consideration of zero.

Note that the two transactions apply to different instruments. The exercise transaction is booked against the new security; the expiry transaction is booked against the interim right the event was loaded against.

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

On the exercise leg, add the units of the new security at the subscription price and remove the cash that funded them. This is a purchase, establishing a cost basis at the subscription price, so there should be no ProfitAndLoss/Realised/Market impact.
On the expiry leg, remove the units of the interim right at zero proceeds. Where a cost basis was allocated to the interim right, that amount realises as a loss on the expiryDate. Where the right was credited at zero cost (as per an IntermediateSecuritiesDistributionEvent that does not set costFactor), there is no realised gain or loss.

Reference examples

A rights issue that is exercised

Holders of a nil-paid right may subscribe for one new share for every four rights held, at 4.50 GBP per new share. The exercise election is chosen, so portfolios subscribe unless instructed otherwise.

[
  {
    "instrumentEventId": "EXRI-ACMECORP-2026",
    "instrumentIdentifiers": {
      "Instrument/default/ClientInternal": "ACMECORP-RIGHTS"
    },
    "description": "Call on intermediate securities - Acme Corp (1 new share per 4 rights at GBP 4.50)",
    "participationType": "MandatoryWithChoices",
    "instrumentEvent": {
      "instrumentEventType": "CallOnIntermediateSecuritiesEvent",
      "expiryDate": "2026-09-01T00:00:00.0000000+00:00",
      "paymentDate": "2026-09-05T00:00:00.0000000+00:00",
      "newInstrument": {
        "instrumentIdentifiers": {
          "Instrument/default/ClientInternal": "ACMECORP-EQ"
        }
      },
      "unitsRatio": { "input": 4, "output": 1 },
      "price": 4.50,
      "exerciseCurrency": "GBP",
      "optionExerciseElections": [
        {
          "electionKey": "EXER",
          "isDefault": true,
          "isChosen": true
        }
      ],
      "lapseElections": [
        {
          "electionKey": "LAPS",
          "isDefault": false,
          "isChosen": false
        }
      ]
    }
  }
]

A portfolio holding 4,000 settled rights on 1 September 2026 receives 1,000 new shares at a total consideration of 4,500.00 GBP, settling on 5 September 2026. Its 4,000 rights are removed on 1 September 2026.

A rights issue that is allowed to lapse

The same terms, but the lapse election is both the default and the chosen election, so portfolios allow their rights to expire unless instructed to subscribe.

[
  {
    "instrumentEventId": "EXRI-ACMECORP-2026-LAPSE",
    "instrumentIdentifiers": {
      "Instrument/default/ClientInternal": "ACMECORP-RIGHTS"
    },
    "description": "Call on intermediate securities - Acme Corp (rights lapse by default)",
    "participationType": "MandatoryWithChoices",
    "instrumentEvent": {
      "instrumentEventType": "CallOnIntermediateSecuritiesEvent",
      "expiryDate": "2026-09-01T00:00:00.0000000+00:00",
      "paymentDate": "2026-09-05T00:00:00.0000000+00:00",
      "newInstrument": {
        "instrumentIdentifiers": {
          "Instrument/default/ClientInternal": "ACMECORP-EQ"
        }
      },
      "unitsRatio": { "input": 4, "output": 1 },
      "price": 4.50,
      "exerciseCurrency": "GBP",
      "optionExerciseElections": [
        {
          "electionKey": "EXER",
          "isDefault": false,
          "isChosen": false
        }
      ],
      "lapseElections": [
        {
          "electionKey": "LAPS",
          "isDefault": true,
          "isChosen": true
        }
      ]
    }
  }
]

A portfolio holding 4,000 settled rights on 1 September 2026 receives no new shares and pays no cash. Its 4,000 rights are removed on 1 September 2026.

An automatic exercise with no subscription cost

Some rights issues exercise automatically and carry no subscription cost, in which case set price to 0. The exercise transaction is still generated, at a total consideration of zero.

[
  {
    "instrumentEventId": "EXRI-ACMECORP-2026-AUTO",
    "instrumentIdentifiers": {
      "Instrument/default/ClientInternal": "ACMECORP-RIGHTS"
    },
    "description": "Call on intermediate securities - Acme Corp (automatic exercise, no subscription cost)",
    "participationType": "MandatoryWithChoices",
    "instrumentEvent": {
      "instrumentEventType": "CallOnIntermediateSecuritiesEvent",
      "expiryDate": "2026-09-01T00:00:00.0000000+00:00",
      "paymentDate": "2026-09-05T00:00:00.0000000+00:00",
      "newInstrument": {
        "instrumentIdentifiers": {
          "Instrument/default/ClientInternal": "ACMECORP-EQ"
        }
      },
      "unitsRatio": { "input": 39, "output": 1 },
      "price": 0,
      "exerciseCurrency": "EUR",
      "optionExerciseElections": [
        {
          "electionKey": "EXER",
          "isDefault": true,
          "isChosen": true
        }
      ],
      "lapseElections": [
        {
          "electionKey": "LAPS",
          "isDefault": false,
          "isChosen": false
        }
      ]
    }
  }
]

A portfolio holding 39,000 settled rights on 1 September 2026 receives 1,000 new shares at a total consideration of zero, settling on 5 September 2026. Its 39,000 rights are removed on 1 September 2026.

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