About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Wolters Kluwer Financial Services Unveils Top 10 Corporate Actions of 2010

Subscribe to our newsletter

Wolters Kluwer Financial Services has released its annual Top 10 Corporate Actions, a list of the most challenging corporate actions from the past year.

The tax and legal experts at Capital Changes, a part of Wolters Kluwer Financial Services that provides corporate action reporting, tax information and analysis, compile the annual listing to alert taxpayers and their financial and tax advisors to corporate actions that have complex or unusual tax consequences.

Corporate actions in the US indicated signs of a somewhat improving economy in 2010, as some companies emerged from reorganisation and presented common shareholders with distributions.

“Corporate reorganisations can be structured in different ways and for different reasons,” said John Kareken, senior analyst for Capital Changes at Wolters Kluwer Financial Services. “However, they occasionally take a surprising twist that presents special challenges. And sometimes even simple events may include unexpected complications.”

One form of corporate reorganisation that continues to raise special concerns is the spinoff, or demerger as it’s known outside the United States. In nontaxable spinoffs, the key question is how to allocate basis between existing shares and the shares of the new company received as part of the event. Answering this question becomes particularly critical in 2011 as the new cost basis reporting law has now taken effect.

The cost basis reporting law also presents challenges for US taxpayers invested in foreign companies.

“US investors holding non-US companies have always had to contend with special tax rules that apply to cross-border transactions, but the cost basis reporting law is one of the newest concerns,” said Lainey Duggan, senior analyst for Capital Changes at Wolters Kluwer Financial Services. “Many foreign companies don’t provide information on how a corporate event should be taxed under the US Internal Revenue Code, which presents challenges for US financial services firms that are now responsible for reporting basis on foreign corporate actions.”

The Top 10 List for 2010 was selected based on voting by Capital Changes subscribers and corporate actions professionals, as well as other criteria, such as how widely held the affected security was and how complex the tax issues were. That analysis shows the following companies’ corporate actions were especially noteworthy:

Top US transactions:

Burlington Northern Santa Fe Corp

Weyerhaeuser Co

Coca-Cola Enterprises Inc

Verizon Communications Inc

General Growth Properties Inc

Top international transactions:

Royal Dutch Shell plc

Brasil Telecom SA

Cable & Wireless plc

Allied Irish Banks plc

Accor SA

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Potential and pitfalls of large language models and generative AI apps

Large language models (LLMs) and Generative AI applications are a hot topic in financial services, with vendors offering solutions, financial institutions adopting the technologies, and sceptics questioning their outcomes. That said, they are here to stay, and it may be that early adopters of Generative AI apps could gain not only operational benefits, but also...

BLOG

SmartStream Adds Exchange Notification Services to Reference Data Utility

SmartStream Technologies, provider of the Reference Data Utility (RDU), has released an Exchange Notification Service (ENS) designed to track, consolidate and normalise reference data notifications published by exchanges. The service was developed in partnership with clients and extends the services of the RDU, which offers a managed service for vendor-sourced reference data. With more than...

EVENT

AI in Capital Markets Summit London

The AI in Capital Markets Summit will explore current and emerging trends in AI, the potential of Generative AI and LLMs and how AI can be applied for efficiencies and business value across a number of use cases, in the front and back office of financial institutions. The agenda will explore the risks and challenges of adopting AI and the foundational technologies and data management capabilities that underpin successful deployment.

GUIDE

ESG Data Handbook 2022

The ESG landscape is changing faster than anyone could have imagined even five years ago. With tens of trillions of dollars expected to have been committed to sustainable assets by the end of the decade, it’s never been more important for financial institutions of all sizes to stay abreast of changes in the ESG data...