Corporate action events
PRIO: Priority Issue
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PRIO announces an offer of new securities, usually a public offer, in which existing holders get priority because the quantity available is limited. Taking part is voluntary: holders subscribe, possibly for more than their priority, or do nothing.
- Code
- PRIO
- Usually announced as
- VOLU
What PRIO means
When a company sells new shares, it may give its existing holders the first claim on them. Unlike a rights issue, the priority is usually not a tradable right: holders simply subscribe and pay the issue price (:90a::PRPP).
The ECB SCoRE rulebook, Clearstream and ASX all give PRIO as VOLU with the options SECU (subscribe), OVER (apply for more than the priority entitlement, possibly scaled back with a pro-ration rate) and NOAC (no action). ASX uses PRIO for both priority issues and security purchase plans and tells them apart with a sub-type.
When you see it
- In an MT564 with
:22F::CAMV//VOLU, a subscription period and a market deadline. - PRIO vs RHTS: in a rights issue holders receive intermediate securities they can sell; in a priority issue they usually do not. If priority is given through distributed open offer rights, the distribution is announced as RHDI with
:22F::RHDI//PRIO.
What to do next
- Pass the offer to beneficial owners with the price, ratio and deadline. Instruct with an MT565 per account before the response deadline, with cash available for the subscription.
- For oversubscription, expect a pro-rated allocation and a refund of the excess cash. Reconcile the MT566: cash debited, new securities credited, refund if any.
Where it appears in MT and ISO 20022
MT (ISO 15022)
- MT564 sequence A (GENL),
:22F::CAEV//PRIOwith:22F::CAMV//VOLU; options:22F::CAOP//SECU,//OVER,//NOAC - MT565 and MT566 sequence A,
:22F::CAEV//PRIO