Subscription Rights 

 

Purpose

The subscription rights scenario allows you (as a stockholder) to retain your share of a stock corporation's basic capital when there are capital increases by exercising acquired and recorded subscription rights.

Process Flow

Overview: Capital increase

 

The following functions are provided to support you at the various processing stages:

Function

Prerequisites

Result

Post subscription rights

 

(Corporate action)

 

 
  • Period-end closing carried out for the old stock.
  • Subscription right is created as a class.
  • Position indicator has been created for the subscription right.

The subscription rights resulting from ownership of the old stocks are in the position.

The old stock position is marked down and the subscription rights position is posted. (see graphic)

Purchase/sell subscription rights (if appropriate)

 

(via transaction management)

The required quantity of subscription rights is in the position.

Exercise subscription right

 

(Exercise security rights)
  • Period-end closing carried out for the subscription right.
  • New stock has been created as a class.
  • A position indicator has been created for the new stock.

The new stock is in the position.

Transfer new stock

 

(Corporate action)
  • Period-end closing carried out for the new stock.

During the transfer posting, the new stock is automatically assigned the ID number of the old stock.

® New stock position.

 

You manage the positions for subscription rights using the same functions as for managing stocks.

Result

Having managed your subscription rights, you return to the decision process for position actions: you have processed your subscription rights position and now need to decide whether to plan another subscription right or switch to a different securities type and position.