Corporate action events
EXWA: Warrant Exercise
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EXWA is the exercise of warrants: holders use the warrant to buy (call warrant) or sell (put warrant) a set amount of shares, cash or another asset at a fixed price, during an exercise period or at expiry.
- Code
- EXWA
- Usually announced as
- VOLU or CHOS
What EXWA means
A warrant gives the right, but not the obligation, to buy or sell an underlying at a fixed exercise price. Issuer warrants on the company’s own shares are exercised by paying the exercise price and receiving new shares. Covered and structured warrants issued by banks may settle in cash instead. The number of shares per warrant is the warrant parity.
Warrants can be exercisable at any time during a period, on specific dates, or only at the end. A warrant whose exercise price is above the market price of the shares is usually not worth exercising and lapses at expiry.
When you see it
- An MT564 with
:22F::CAEV//EXWA. The SMPG grid shows two set-ups: VOLU for warrants exercisable at chosen points over a period (optionsEXER,NOAC, andBUYAorSLLEwhere offered), and CHOS for warrants that are voluntary during the period but end with a final exercise opportunity before expiry (optionsEXERandLAPSorNOAC). Expect the exercise price (:90a::PRPP), the parity, the exercise period, the expiry date and the cash debit date. - EXWA vs EXRI: rights come from a rights distribution and are short-lived; warrants usually have a longer life and their own terms. EXWA vs CONV: conversion swaps a convertible security without new money. EXWA vs COOP: company options are granted by the company under their own rules.
What to do next
- Check whether exercising is in the money and confirm the client’s decision. Instruct with an MT565 before the deadline and make sure the cash for the exercise price is available on the debit date.
- When the MT566 arrives, reconcile the warrants debited, the cash paid and the shares credited at the parity, or the cash received for cash-settled warrants. Close positions that lapse at expiry.