Modelling a dividend reinvestment (DRIP)

You can model a dividend reinvestment as a corporate action of type DividendReinvestmentEvent in LUSID. See all supported corporate actions.

Note the following:

DividendReinvestmentEvent is valid for instruments of type Equity and SimpleInstrument.
A dividend reinvestment plan gives the holder a choice between taking the dividend as cash and having the issuer reinvest it in additional units. Use DividendOptionEvent (DVOP) instead where the issuer instead creates new share capital in exchange for the dividend.
The entitlement date is the exDate specified when you load DividendReinvestmentEvent, not recordDate.
Amounts are calculated from the total number of instrument units held on the entitlement date, settled and unsettled.
Every DividendReinvestmentEvent requires both a single CashElection and a single SecurityElection. The former establishes the dividend amount, and LUSID uses that amount to size the reinvestment leg, so you must supply the cash election even when reinvesting.
Where the security election is taken, LUSID rounds the new units down to a whole number. The leftover cash (the difference between the dividend amount and the value of the units purchased) remains as a cash balance. There is no cash-in-lieu or buy-up outcome.
The two legs settle on different dates. The cash leg has a transaction date of exDate and a settlement date of paymentDate. The security leg has a transaction date of paymentDate and a settlement date of securitySettlementDate if specified, otherwise paymentDate.

Loading `DividendReinvestmentEvent`

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

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

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

Participation type	Election(s)	Election choices	Further action required?
`MandatoryWithChoices`	Exactly one `CashElection`	Set the following: ✅ Is declared You can set the following if desired: ✅ Is chosen ✅ Is default	❓Optional. The Is Chosen election occurs unless you instruct to take a different election per portfolio.
Exactly one `SecurityElection`	Set the following: ❌ Is declared You can set the following if desired, but only if not set on `CashElection`: ✅ Is chosen ✅ Is default

Participation type

Election(s)

Election choices

Further action required?

MandatoryWithChoices

Exactly one CashElection

Set the following:

✅ Is declared

You can set the following if desired:

✅ Is chosen

✅ Is default

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

Exactly one SecurityElection

Set the following:

❌ Is declared

You can set the following if desired, but only if not set on CashElection:

✅ Is chosen

✅ Is default

Note there is no lapse outcome; a holder who takes no action always receives the chosen leg rather than forfeiting the dividend.

Setting the reinvestment price

Set price on SecurityElection to establish how many new units the dividend buys. LUSID divides the dividend amount by this price to size the reinvestment leg if chosen. Do not set unitsRatio.

Issuers commonly confirm the reinvestment price after announcing the dividend, and often only shortly before the security settlement date. You can load the event with the cash election fully populated and the price still unset, then update the security election when the price arrives. Until then, LUSID reports the event as economically incomplete and cannot calculate the reinvested units.

Instructing to take a different election per portfolio

If you want a particular portfolio to take an election other than the one chosen on the event, load an event instruction into that 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 some or all of the following transaction types to handle automatically-generated output transactions. They are not provided for you.

Transaction type (click for our recommendation)	Implement the transaction type if…	Intended economic impact
DripCashIncome	Always required, whichever election is chosen	Credits the full dividend amount to a cash balance and reports it as income against the underlying instrument.
DripSecurityReinvestment	`SecurityElection` is chosen	Credits the reinvested units and debits the cash that funded them.

Where the security election is chosen, both transactions are generated: the cash leg credits the whole dividend, and the security leg then spends part of it on units. The residue left by rounding units down stays in the cash balance.

You can give a transaction type any economic impact you like. Depending on the chosen election, our recommendations:

Create or update a cash holding in the dividend currency.
Report the cash as income using the ProfitAndLoss/Total/Other metric.
Do not change the units and cost of the underlying instrument if the cash election is chosen, so ProfitAndLoss/Realised/* and ProfitAndLoss/Unrealised/* metrics are unchanged.
Add the reinvested units at the election price and remove the cash that funded them if the security election is chosen, so there is no ProfitAndLoss/Realised/Market impact at the point of reinvestment. Any subsequent gain or loss on those units realises when you dispose of them.

Reference example

In this example the issuer declares a dividend of 18 cents per unit, and confirms a reinvestment price of 4.65 USD per unit. The security election is chosen, so every registered portfolio with a holding on the ex-date has its dividend reinvested unless instructed otherwise.

[
  {
    "instrumentEventId": "DRIP-ACMECORP-2026",
    "instrumentIdentifiers": {
      "Instrument/default/ClientInternal": "ACMECORP-EQ"
    },
    "description": "Dividend reinvestment - Acme Corp (0.18 USD per unit, reinvested at 4.65 USD)",
    "participationType": "MandatoryWithChoices",
    "instrumentEvent": {
      "instrumentEventType": "DividendReinvestmentEvent",
      "announcementDate": "2026-08-01T00:00:00.0000000+00:00",
      "exDate": "2026-08-15T00:00:00.0000000+00:00",
      "recordDate": "2026-08-16T00:00:00.0000000+00:00",
      "paymentDate": "2026-09-01T00:00:00.0000000+00:00",
      "securitySettlementDate": "2026-09-04T00:00:00.0000000+00:00",
      "cashElections": [
        {
          "electionKey": "CASH",
          "dividendCurrency": "USD",
          "dividendRate": 0.18,
          "isDeclared": true,
          "isDefault": true,
          "isChosen": false
        }
      ],
      "securityElections": [
        {
          "electionKey": "SECU",
          "price": 4.65,
          "isDefault": false,
          "isChosen": true
        }
      ]
    }
  }
]

For a portfolio holding 1,000 units on the ex-date, LUSID:

Generates a DripCashIncome transaction for the full dividend of 180.00 USD, with a transaction date of 15 August and a settlement date of 1 September.
Generates a DripSecurityReinvestment transaction for 38 units at 4.65 USD, being 176.70 USD, with a transaction date of 1 September and a settlement date of 4 September. LUSID rounds down from 38.7 units.
Leaves the remaining 3.30 USD in the cash balance.

Had the cash election been chosen instead, LUSID would generate only the DripCashIncome transaction, for the full 180.00 USD.