The position that gets the benefit is rarely the position on the trading book. Open sells, failed buys, stock on loan, and stock borrowed all adjust the entitled quantity. On a rights issue, splitting one client holding across several brokers can even lose a share to fractional rounding — each loan is entitled separately, and the fractions do not add back.
In the UK, CREST can transform an unsettled trade into the new security so the parties do not have to cancel and rebook. Mandatory events without options transform automatically. Optional and voluntary events need an ACON election; without one, CREST applies the default.
Atlantic Horizon UCITS ICAV lends 15,000 Thames Industrial shares through State Street’s lending programme. The CREST depot line is smaller than the economic book. On a cash dividend the borrower manufactures 12p back to the ICAV. On a scrip, someone still has to elect. On Nippon Industrials’ split, the loan quantity itself has to be doubled or the collateral is wrong.
Elections run against a stack of deadlines: agent (earliest, so the custodian can collate), issuer, market, deposit (a time of day, not just a date), buyer-protection, and guaranteed participation (called the deposit date in the US). Clients like to wait for the last price; agents like answers early. The tension is the job.
Dublin still has to release NAV on the entitled position, not the depot line that forgot the loan. Irish UCITS administration cannot pretend the lent shares disappeared. A 15,000 share loan on Thames Industrial at 12p is £1,800 of manufactured income; miss it and the UCITS is short, the borrower is long, and the depositary will ask why the register and the fund books disagree.
Deadlines stack earlier as you move up the chain. The registrar’s market deadline is the last legal moment. State Street’s agent deadline is earlier. Dublin’s internal cut-off is earlier still. The manager who waits for the last tick on Thames Industrial’s share price is waiting into a wall the custodian already built.