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Corporate action events

REDO: Redenomination

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REDO announces that the unit of a security is restated, for example its nominal value moves from a national currency into another currency. It is mandatory; often informative, it includes an exchange when the ISIN changes.

Code
REDO
Usually announced as
MAND

What REDO means

In a redenomination the issuer restates the denomination of its securities: the currency, the nominal per unit, or both. The best known case is the move of bonds and shares from national currencies into euro, but the same event applies to any currency change.

The ECB SCoRE rulebook gives REDO as MAND, with no movement, or with a SECU option (old ISIN debited, new ISIN credited at the announced ratio). Clearstream states that without an ISIN change it sends REDO as information only, and that with an ISIN change it processes the exchange as CHAN with SECU.

When you see it

  • In an MT564 with the effective date, new denomination currency and, where relevant, the new to old ratio.
  • REDO vs INCR and DECR: those change the nominal per unit in the same currency. REDO vs SMAL: SMAL changes the trading unit, not the currency.

What to do next

  • Update the denomination currency, nominal and minimum denomination in static data from the effective date.
  • Check how rounding differences are settled (often in cash) and reconcile any MT566.
  • Review pricing sources and settlement instructions that refer to the old currency.

Where it appears in MT and ISO 20022

MT (ISO 15022)

  • MT564 sequence A (GENL), :22F::CAEV//REDO with :22F::CAMV//MAND
  • MT566 sequence A, :22F::CAEV//REDO when an exchange is booked

MX (ISO 20022)

  • seev.031 CorpActnGnlInf/EvtTp/Cd = REDO (checked in seev.031.001.15), with the flag in CorpActnGnlInf/MndtryVlntryEvtTp/Cd
  • The same CorpActnGnlInf/EvtTp/Cd = REDO appears in seev.033 (instruction) and seev.036 (movement confirmation)