Company Option (COOP)

SFTR Report - NEWT | Corporate Action Cluster - Addition Sec on Loan | Cash Move - Y>

Status: Best Practice Finalised, Last Updated: 24/05/2021

SFTR Report - NEWT | Corporate Action Cluster - Addition Sec on Loan | Cash Move - Y

Description:
A Company Option may be granted by the company, allowing the holder to take up shares at some future date(s) at a pre- arranged price in the company. A company may not grant options which enable the holder to take up unissued shares at a time which is five or more years from the date of the grant. Option holders are not members of a company. They are contingent creditors of a company and hence may, in some instances, be entitled to vote on and be bound by a scheme of arrangement between the creditors and the company. As many options have multiple exercise periods a company option will either lapse or carry on to the next expiry date.

Best Practice:
When booking a Company Option, a loan contract should be booked in addition to the current contract with your counterparty on the pay date of the event. (COAC-72)