Corporate action events
LIQU: Liquidation Dividend/Liquidation Payment
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LIQU announces a payment from a company or fund that is being wound up: cash, other assets, or both, paid out to holders. It is usually mandatory, sometimes with a choice of consideration, and the underlying security is debited only on the final payment.
- Code
- LIQU
- Usually announced as
- MAND or CHOS
What LIQU means
When a company or fund is liquidated, its assets are sold and the proceeds go to creditors and then to holders in order of priority. LIQU is the event that pays the holders’ share. The payment can be cash (CASH), securities (SECU) or both (CASE).
A liquidation often pays out in several steps. The ECB SCoRE rulebook makes the distinction explicit: an interim liquidation payment leaves the position in place so later payments can follow, and only the final payment debits the underlying security.
If the company is wound up and there is nothing to distribute, the right event is WRTH (worthless), not LIQU with a zero amount.
When you see it
- In an MT564 with
MAND, orCHOSwhen holders may choose between cash and securities. CHOS events carry a response deadline (:98a::RDDT) and a market deadline (:98a::MKDT). - On closed funds and wound-up companies, often after a SUSP or DLST event and sometimes alongside a BRUP announcement.
- Some account servicers map liquidation steps to other codes. Clearstream, for example, states it will announce an interim liquidation with choice as DVCA or SOFF with CHOS, and a final one as EXOF with CHOS.
What to do next
- For
CHOS, instruct before the response deadline; otherwise the default option applies. - On the MT566, check whether the underlying position was debited. If it was not, the payment was interim and the position must stay on your books for later payments.
- Liquidation proceeds are often taxed differently from dividends (for example as a return of capital). Check the tax details in the notification before booking the cash as income, and keep the confirmation for the holder’s tax records.
Where it appears in MT and ISO 20022
MT (ISO 15022)
- MT564 sequence A (GENL),
:22F::CAEV//LIQUwith:22F::CAMV//MANDor//CHOS; options in sequence E with:22F::CAOP//CASH,//SECUor//CASE - MT566 sequence A,
:22F::CAEV//LIQU; sequence D1 for a securities debit or credit, D2 for the cash