eBay (EBAY) to Paypal (PYPL) Spinoff

Below, we have eBay to Paypal Portfolio Center spin off instructions to help back office operations for advisors.

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 PYPL or EBAY:

• 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

Go to the Transaction WriterSpinoff Wizard Instructions

• 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 EBAY then click Next

• Enter the information for the new security, PYPL

• Click next and run on All Portfolios
• Click Finish
• The following transaction types should show up:
  • Credit of Securities – EBAY – This transaction will come back in with adjusted basis
  • Credit of Securities – PYPL
  • Debit of Securities – EBAY
  • 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 EBAY 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 EBAY 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-post any sales or transfers that occurred.
  • Be sure to use your screenshots to note which transactions belong to EBAY and PYPL 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.

 

Investor Relations

http://files.shareholder.com/downloads/AMDA-4BS3R8/480076664x0x838879/5FED72C7-57F2-43CD-B5EB-2BFB6CD75256/Separation_Update.pdf

Cost Basis Information

http://files.shareholder.com/downloads/AMDA-4BS3R8/480076664x0x841139/CAB5CD39-B1DF-4510-B567-5EA26F829FE2/PayPal_Form8937.pdf