This section explains how to purchase and resell equity deals.
In Treasury, an equity is a share of stock that your company either invests in or wishes to track. You use the equities deal type and related windows to set up stock issue information, purchase, track and resell shares of stock, process cash dividends, and settle, revalue, and account for stock investment activities. You can also enter and maintain stock information for clients of your company.
Note: The purpose of the Treasury equities functionality is to manage your company's investment or trade in stocks issued by other companies. The Treasury equities functionality is not designed to administer your company's own stock offerings, nor is it intended to be used by a brokerage firm to manage high trading volumes.
Use the Stocks window to record purchases and sales of stock. You can also use the Stocks window to access other windows to view cash dividend transactions, deal summaries, or the history of your equity deals.
The status of an equity deal can change in these ways:
The default status is Current.
If the deal subtype is BUY and the deal has not been settled, journalized, or partially resold, you can change the deal status to Cancelled.
When there are no longer any shares remaining in the deal, the status changes to Closed.
Cancelled and Closed deal records are read-only.
Define portfolio codes for trading in stocks. See: Portfolio Codes.
Set up stock brokers as Equity Market counterparties in the Counterparty Profiles window. See: Counterparty Profiles.
Set up stock issues for the stocks that you want to buy or sell. See: Stock Issues.
(Optional) Set up the limits that you want to apply to your equity deals. See: Limits Setup.
(Optional) Define deal link codes to link your deals to other deals. See: Deal Inking Codes.
(Optional) Define brokerage information for counterparties. See: Tax/Brokerage Setup.
(Optional) Set up tax schedules and related tax information for your equity deals. See: Tax Schedule and Details.
Navigate to the Stocks window.
Enter the Dealer for this stock deal.
The dealers that you can choose from the list of values are the users in your company who are authorized to engage in stock transactions.
If necessary, update the Deal Date. The deal date must be on or after the stock issue date.
Enter the Company that is purchasing the stock.
Enter the stock broker for this deal in the Counterparty field.
If you are purchasing the stock on behalf of a client, enter the Client name.
Enter the Portfolio for the deal.
Choose the Main Details tab. Treasury automatically populates the Buy Deal Subtype.
Enter the stock Currency. If you leave this field blank, the field is populated when you enter an Issue Code.
Enter the stock Issue Code. If you already entered a currency, the list of available issue codes is limited by the currency you entered.
Enter a Product Type for this stock issue. Treasury populates this field with the product type assigned to the stock issue, if there is one, but you can change it.
Note: You can only enter product types that you have authorization to use.
Enter a Settlement Date for this deal. The settlement date must be on or after both the system date and the stock issue date.
Enter the Price per Share that you are buying. The value in this field can have a maximum of six decimal places.
Note: You can increase the number of outstanding shares by purchasing additional shares at a price of zero as a method to support stock dividends or stock splits. The system properly accounts for positions, settlements, and accounting of the stock at the stock issue level. It is important to note that the individual deals reflect the actual purchase prices, so revaluation gains or losses may be overstated for one deal and understated for the other. The net effect should be correct since you can set up the accounting entries for both deals of the stock issue to post to the same GL accounts.
Enter the Number of Shares that you are buying.
Treasury populates the Shares Remaining and Consideration fields. Consideration is the calculated consideration price for the shares. The number of decimal places displayed in the Consideration field depends on the number of decimal places specified for the price and the maximum number of decimal places for the currency of the stock.
Complete the necessary fields in the Additional Details tabbed region.
Use the Comments fields to enter any comments about the deal. Use the Reference fields to enter reference information, such as a deal number or dealer number.
Enter a Link Code if you want to link this deal to other deals.
If necessary, enter a Limit for this deal. You can enter a limit code from any authorized counterparty limit that matches the company and issuer for this deal.
Complete the necessary fields in the Brokerage/Tax tabbed region.
Save your work.
To resell this stock, choose the Resales button. See: Reselling Stocks.
To view dividends for this stock, choose the Dividends button. See: Viewing Cash Dividends.
To view summary information for this stock, choose the Deal Summary button. See: Viewing Deal Summary.
To view the transaction history for this stock, choose the Deal History button. See: Viewing Resale and Dividend History.
Use the Stock Resales window to resell stocks.
Record stock buy deals. See: Purchasing Stocks.
Navigate to the Stock Resales window. The Find Stocks for Resale window appears.
In the Find Stocks for Resale window, query the stocks that you want to resell.
The Stock Resales window appears with the stocks that match your query.
In the Resale Shares field, enter the number of shares that you want to resell. The value you enter must be less than or equal to the number of shares in the Number of Shares field.
Note: You can decrease the number of outstanding shares by reselling shares at a price of zero as a method to support reverse stock splits. The system properly accounts for positions, settlements, and accounting of the stock at the stock issue level. It is important to note that the individual deals reflect the actual purchase and resale prices, so revaluation gains or losses may be overstated for one deal and understated for the other. The net effect should be correct since you can set up the accounting entries for both deals of the stock issue to post to the same GL accounts.
In the Resale Price field, enter the price to resell the shares.
Treasury populates these fields automatically:
Total Number of Shares: The total number of shares that are currently held for the stock issue code.
Currency: The currency of the stock.
Average Cost of Total Shares: (Number of Shares * Price Per Share)/Sum of Number of Shares for all displayed records.
Total Resale Shares: The total number of shares that have been resold.
Resale Consideration: Total Resale Shares * Resale Price.
Average Cost of Resale Shares: (Number of Shares * Price Per Share)/Sum of Number of Shares for rows where Resale Shares field is populated.
Resale Profit/Loss: The realized profit or loss on the Total Resale Shares. This value is calculated using the individual buy prices, not the average price.
Save your work. The Complete Sale Details button is activated.
To complete the resale, choose the Complete Sale Details button. The Stocks window appears, with deal subtype SELL and the stock resale details populated.
If necessary, update the Settlement Date, Counterparty, Client, or System Date.
Save your work. Treasury updates the original purchase deals in this way:
Profit/Loss field is populated with the realized profit or loss of the sold portion.
Shares Remaining field is updated with the number of shares available after the resell.
Use the Cash Dividends by Issue Code window to enter cash dividends for stock issues and generate dividend transactions. You can also use this window to view the complete list of cash dividends for a stock issue.
Recording and generating cash dividends is a system-wide process that applies to all companies, regardless of the access level of the user entering the dividend. However, users can only view dividend transactions belonging to the companies for which they have appropriate authorization.
Note: When you delete a cash dividend record for a stock issue, Treasury deletes all related dividend transactions across all companies that have not been settled or journalized.
Set up stock issues. See: Stock Issues.
Navigate to the Cash Dividends by Issue Code window. The Find Cash Dividends by Issue Code window appears.
In the Find Cash Dividends by Issue Code window, query the records that you want, or choose New to enter a new record. The Cash Dividends by Issue Code window appears with the records that match your query, or a blank window for entering a new record.
Existing records are displayed in descending order according to the generation status (records that have not had transactions generated are listed first), issue code, and declare date. The Generated box is checked for records that have transactions generated.
Enter the stock Issue Code. Treasury populates the Currency field with the stock issue currency.
Enter the dividend Declare Date. You must enter a date that is on or before the system date.
Enter the dividend Record Date. A stock purchase deal is eligible for a cash dividend if the settlement date is on or before the Record Date.
In the Payment Date field, enter the cash dividend distribution date.
In the Dividend per Share field, enter the value of the dividends per share.
Choose the Generate Transactions button to create cash dividend transactions for eligible deals.
Save your work.
Repeat steps 3 to 9 for each record that you want to generate dividend transactions. The Generate Transactions button is disabled once all records in the window have had transactions generated.
To view the list of cash dividends by deal, select the record that you want and choose the View button. You can only select records that have transactions generated.
Use the View Cash Dividends by Deal window to view the cash dividends for one or more deals.
Enter and generate dividends. See: Entering Cash Dividends.
You can navigate to a cash dividends view in either of these ways:
Select a deal in the Stocks window and choose the Dividends button; or
Select a record in the Cash Dividends by Issue Code window and choose the View button.
The Find Cash Dividends window appears.
In the Find Cash Dividends window, query the dividends that you want to view. If you leave all of the fields blank, Treasury displays all of the deals with dividend transactions, listed in descending order by company, issue code, declare date.
The View Cash Dividends by Deal window appears with the result of your query.
Use the scroll bar to view record values. You can also run new queries in the View Cash Dividends by Deal window.
Use the View Deal Summary window to view summary information for your stock deals.
Record stock purchase deals. See: Purchasing Stocks.
Navigate to the Stocks window.
Query or enter the deal that you want.
Choose the Deal Summary button. The Find Deals window appears.
In the Find Deals window, query the deals that you want to view.
The Deal Summary window appears with the result of your query.
Use the scroll bar to view record values. You can also run new queries in the Deal Summary window.
Use the View Resale/Dividend History window to view the resell and dividend history for your stock buy deals.
Resell stocks. See: Reselling Stocks.
Enter and generate dividends. See: Entering Cash Dividends.
Navigate to the Stocks window.
Query or enter the buy deal that you want.
Choose the Deal History button. The View Resale/Dividend History window appears.
Choose the Resales tab to view resale information for the deal. Choose the Cash Dividends tab to view dividend history information for the deal.
You can run new queries in the View Resale/Dividend History window. Choose the deal that you want in the Deals region, then use the tabbed regions to view detailed information.