On July 1st, 2015 DuPont (DD) announced that it has completed the spin-off of The Chemours Company (CC). Always defer to the Investor Information releases for any and all corporate action information or consult a tax advisor if there are questions regarding the cost basis. Here you will find the Press Release and here the FORM 8-K. We have outlined best practice instructions of the Dupont (DD) to The Chemours Company (CC) for Schwab Portfolio Center below.
Preparation:
If you have posted through transactions from custodians to reconcile placeholders while waiting for information, make sure to un-post the following types of transactions related to CC or DD:
- Schwab – Unpost and block:
- Credits of Securities
- Debits of Securities
- Journals for cash payout
- Journals for Cash in Lieu
- Deposits for Cash in Lieu and/or Cash payouts
- Fidelity – Unpost and block
- Splits
- Credits of Securities
- ROP
- Pershing – Unpost and block:
- Credits of Securities
- Debits of Securities
- Journals for cash payout
- Journals for Cash in Lieu
- Deposits for Cash in Lieu and/or Cash payouts
- TDAmeritrade – Unpost and block:
- Credits of Securities
- Journals for cash payout
- Journals for Cash in Lieu
- Deposits for Cash in Lieu and/or Cash payouts
Changing the old Circuit City Symbol and adding the new Chemours Co
Some databases may contain the old Circuity City security record with the same symbol CC as the new Chemours Co. This will need to be changed.
- Go to the Security Tab and search for the CC symbol. If it comes up, change the symbol from CC to CC-OLD. If the symbol CC came in brand new, skip to the Spinoff Wizard Instructions.
- Save changes and then click New to add a new security
- Symbol: CC
- Description The Chemours Co
- Click save and then close
- Manually add the pricing history for the new CC security from 7/1/15 forward as necessary
- You can use Yahoo Finance for historical pricing
- http://finance.yahoo.com/q/hp?s=CC+Historical+Prices
- Click on Go to Price History
- Click on New
- Add the date and the price
- Click OK
- Close the security details when complete
Reasoning for Symbol Change and Addition:
The reason we are doing this is, so that the custodian records being sent down for pricing and transaction data connected to the symbol CC, are not linked to the old Circuit City Record. Transaction records especially for Realized Gain and Loss or Income reports should correctly show that anything starting as of July 1, 2015 are for Chemours Co and not the old Circuit City company, which is no longer in business.
Reconnecting the Security Path
- Click on the Interface tab
- Highlight the interface the spinoff is coming through (if there are multiple custodians affected, you will need to do this for each custodian)
- Right Click and choose Settings
- Click on the Paths and Assignments tab
- Choose Security Codes
- Search for CC (CTRL+F)
- Change the PC symbol from CC-OLD to CC by clicking on the triple dot button and searching for the new CC security entered into the system
- Click OK
- Click OK again and close the Settings box
NOTE: Now that the new CC security was added after changing the symbol on the old Circuit City record, it needed to be linked to the custodian symbol sent down so that pricing will be posted to the correct security going forward. Leaving this link unchanged means that pricing for CC would continue to post to the CC-OLD record and cause posting price conflicts.
Spinoff Wizard Instructions
- Go to the Transaction Writer
- Click on New
- Enter the following details in the Transaction List Information
- Click Save
- Click on the wizard button and choose Spin-Off wizard, then click OK
- Enter the information for the original security DD then click Next
- Enter the information for the new security, CC (the new addition)
- Click next and run on All Portfolios
- Click Finish
- The following transaction types should show up:
- Credit of Securities – DD – This transaction will come back in with adjusted basis
- Credit of Securities – CC
- Debit of Securities – DD
- Sells – if any appear for fractional shares (which may or may not generate), block them. You will use the interface transactions to remove any fractional shares.
- Post the Debits FIRST
- The reason they must be posted first is so that the full position of DD is removed. This will transfer out all trade lots and flatten the position. Once the credit comes back in, it will bring the quantity back and the adjusted down cost basis for each trade lot that originally occurred.
- If we try to post the credits first or allow the system to post without bias (it does not properly post in order), the new credit could be part of the debit’s removal of security quantity and cost basis. The new credit(s) are trade lots and we do not want the debit (which is meant to be used as an adjustment transaction) to use this new trade lots’ information in this corporate action.
- Close the list once the debits are posted and click Post List
NOTE: The total market value of the DD debit should equal the total market value of the combined credits for ALL securities. This is to prevent the Transfer section from showing up on the Performance Reports in portfolio Center which are representative of non-traditional accounting flows (journals, debits, credits, trades to NONE). We don’t want this extra section showing up, so it’s imperative to use the wizards to wash the values of in and out transactions
Re-Reconciling the Interface
- Right click and delete the Interface Reconciliation Reports for each custodian affected**
- Re-run the reports so you can see fractional shares and any other items that need to be re-posted
- Re-post any sales or transfers that occurred.
- Be sure to use your screenshots two note which transactions belong to DD and CC just in case
- For any Journals, ROP, Deposits or Income that came in for Cash in Lieu of fractional shares, change them to one of the following:
- Income (Payment in lieu of Dividend) – this should be used in the event there are no fractional shares to sell
- Edit the transaction (CTRL+E)
- Security Type: Equities
- Activity Type: Income
- Income Amount: Should auto populate
- Change to: Payment in lieu of Dividend
- Normal Income: No
- Account ID: CASH
- Sale – this should be used in the event there are fractional shares to sell. Change the transaction types to an Equity – Sale and remove fractional shares.
- Edit the transaction (CTRL+E)
- Security Type: Equities
- Activity Type: Sell
- Quantity: Fractional Share Amount (CTRL+# for balance)
- Account ID: CASH
- Once the cash in lieu has been updated, sales and transfers have been re-posted, re-run the reconciliation report to make sure that all data is fully reconciled.
- Income (Payment in lieu of Dividend) – this should be used in the event there are no fractional shares to sell
**NOTE: The reason that the reconciliation report needs to be deleted is because we have changed the linking of the CC-OLD (Circuit City) and CC (The Chemours Co) securities in the paths and assignments of the interface. When the symbols were dissected, the link between symbols changed the data and only recognized CC-OLD as the final security. Once the CC symbol from the custodian was re-directed to its correct ticker to post pricing data, it altered the linking that the reconciliation report originally used for verification. By deleting the file you are refreshing the link that verifies share quantities.
Press Release
Investor Relations
http://d1lge852tjjqow.cloudfront.net/CIK-0000030554/bc103ccc-64b5-477b-a52b-176545d6142a.pdf
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