Corporate action events
CAPG: Capital Gains Distribution
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CAPG is a distribution of profits a company or, most often, a fund made by selling assets. Mutual funds, unit trusts and SICAVs pay it to their holders, and it is often reinvested in more units of the fund.
- Code
- CAPG
- Usually announced as
- MAND (CHOS also allowed)
What CAPG means
A fund that sells investments at a profit realises capital gains. Many fund structures pay those gains to investors at least once a year, separately from the income (dividends and interest) the fund received. CAPG is the code for that capital gains payment.
The SMPG group agreed to keep it as a separate event from a cash dividend for tax reasons: in many tax systems realised gains passed to investors are taxed differently from income, sometimes split into short-term and long-term gains. The cash per unit and the dates work like a dividend.
When you see it
- An MT564 with
:22F::CAEV//CAPG, normally MAND with a CASH option. The SMPG grid also allows CHOS, for example where a currency choice is offered or where the holder can choose to reinvest. Funds with a reinvestment plan often pay the gain in new units by default. - Compare with DVCA (income dividend), CAPD (cash from the capital account) and ACCU (income kept in accumulation units). A fund may announce a CAPG and a DVCA on the same day with the same dates; they are two events with two references.
What to do next
- For a mandatory CAPG, book the cash or the reinvested units on the payment date and reconcile with the rate per unit. For a CHOS event, collect the client’s choice and instruct with an MT565 before the deadline.
- Report the amount as a capital gain distribution, not as dividend income, and keep any short-term or long-term split the fund provides for tax reporting.