9.3 Product Code - EQ01

EQ01 – Equity Share

Business Scenario

Equity shares are issued by the companies in order to raise the capital. Companies raise funds through IPO, FPO and Rights/warrants issue.

Target audience / Beneficiaries: Investors, Corporate bodies.

Customer segment: Individual Investors, Corporate customers and financial institutions

Introduction

A share or stock is also known as an equity share as well. The equity share basically represents ownership in the company. When a company needs capital or money to operate, it generates the required funds by selling ownership in the company. This means that the company issues equity shares for a price and these shares represent ownership in the company for the one who purchases the shares. These shares are an ownership in the company and give the owner the right to have a share in the profits of the firm.

Features of equity shares are as follows:

• They do not have any preferential right regarding payment of a dividend or the repayment of capital at the company's winding.
• These shares are risk-bearing shares because they are the company's actual owners whenever the company runs into losses they have to bear the losses (Liability is limited to the face value of share).
• Equity shareholders enjoy voting right whenever there is a meeting they will enjoy their voting power, enjoys voting power in electing the board of directors.
• Equity shares are easily transferable.
• The company gives the bonus shares to the equity shareholders at a free cost on account of reserves, undistributed profits and accumulated profit.
• Equity shareholders are given priority whenever a company wants to raise fresh capital.

Summary

• Company issues the shares to the public.
• Subscription and allotment of shares.
• Trading in the secondary market.
• Rights/warrants/Bonus/dividend etc.

Synopsis (ex. High level features etc.)

The shares can be issued at premium, discount or at par. Share holder will be getting dividend, bonus shares, warrants or rights if any.

Detailed Coverage

Corporate Actions

• Bonus - Stock dividend
• Stock to cash option
• Bonus – Cash dividend
• Rights / Warrants definition
• Rights / Warrants Expiry

Portfolio details

• Issuer, customer and bank portfolios could be defined.
• WAC, LIFO, FIFO, DM costing methods can have for each type of portfolio
• Capturing Revaluation details for the portfolio
• Capturing customer, currency or branch level restrictions
• Defining the limit tracking details
• Advice details

Interest / Charges / Commission & Fees

User can define Charges.

Special/Other Features

User can define tax and brokerage components for the deals.

Advices / Statements are supported

Advices Supported

Payment/Confirmation Messages

Messages

OBTR supports the following outgoing type of SWIFT Messages:

• MT 517,MT 518,MT 535,MT 536,MT 537,MT 540,MT 541,MT 542,MT 543,MT 544,MT 545,MT 546,MT 547,MT 549,MT 564,MT 566, and MT 580.

Also, supports the STP for following incoming SWIFT Messages:

• MT 515, MT 518, MT 534, MT 535, MT 539, MT 544, MT 545, MT 546, MT 547

.

Additional information (ex. UDF & other Special Maintenance)

In case, Bank wants to capture some other details about the deal or the parties involved, the same could be customized by way of using UDF option available at various screens.

• Branch Parameter
• Messaging Parameter
• Local Holidays
• Security Batch Maintenance
• Market code and price maintenance
• Security instruments
• SK Location Maintenance
• Security, Deal, Portfolio and Combination Products
• Security Product, Deal product and Portfolio product preference classes
• Portfolio definitions
• Tax scheme class
• Combination products