A warrant is a security the issuer has sold: the holder may buy (sometimes sell) the underlying at a strike, during a window or over the warrant's life. Exercise is dilutive, because the company issues or delivers shares. An exchange or OTC option is the opposite construction — a bilateral contract between two market counterparties, with no new capital issued by the company. The operations stack follows the legal form. Warrants are asset-servicing events with ISINs. Options are clearing and margin events with expiries.
In-the-money means the strike is better than the market; out-of-the-money means it is not. Warrants that expire in-the-money and are not exercised are, on many programmes, cash-settled automatically — "lazy money" — so the holder is not left with a worthless expiry through inattention. Out-of-the-money warrants lapse with no payment. Treat lazy money as a mandatory mop-up of a voluntary event, not as an election you still need to chase.
Physical exercise spends client money at the strike. That is a front-office ticket and an operations release, the same dual-control as a rights take-up. Lazy-money cash coming in is the opposite flow and should not require an election. Mixing the two is how a desk waits for an MT565 on a credit that was always going to arrive, or spends strike cash on a warrant the terms already cash-settled.
Atlantic Horizon UCITS ICAV can hold a listed warrant over Thames Industrial plc, in CREST, through State Street. The Cayman sleeve is more likely to hold a Nippon Industrials KK warrant (Tokyo, ISIN JP3899200005 on the ordinary; the warrant has its own code) that the Irish prospectus may not want. Same sponsor, same custodian, two products. Exercise of either spends cash and delivers stock — or, on lazy money, delivers cash and extinguishes the warrant.
Dublin still has to release NAV on the Irish UCITS while the warrant is live. The warrant is not the ordinary share. Booking it onto Thames Industrial's fully-paid ISIN because "it will be exercised" is how a desk delivers the wrong instrument and prices a NAV on stock it does not yet own. Irish administration cannot outsource that distinction, or the fund's shareholder register, to the warrant agent.
Options on the same names live somewhere else. A listed put or call on Thames Industrial, cleared at ICE or similar, does not change Thames's share count when a market maker is assigned. A Nippon equity option in Osaka is the same idea in another time zone. Do not send those expiries down the MT565 warrant pipeline. The golden copy's event type is the control.
The operational question is always the same. Is this company paper with an ISIN, or a contract with a counterparty? Who receives the strike cash? What happens if nobody instructs — lapse, or lazy money? Answer those three and the booking follows. Guess from the underlying ticker and you will exercise the wrong thing.