FAQs for Merger Transactions

Can I use the Corporate Action wizard to enter merger transactions for manually entered transactional accounts?

You cannot use the Merger/Exchange Wizard for manually created transactional accounts. However, you can use it for accounts imported through the Microsoft Excel - Transactions interface. If you have a manually created transactional account, you can establish a Microsoft Excel account mapping so that the Corporate Action Wizard can be used. A disadvantage is that you will not be able to reconcile these accounts as you can in the import blotter. Click here for steps on how to create a Microsoft Excel account mapping.

What if the merger I'm looking for isn't listed on the Corp Action in My Practice page?

If you do not see the merger you are looking for on the Corp Action in My Practice page within the Corporate Action Warehouse, you can still use the Corporate Action Wizard and simply populate the information yourself.

What if information is missing from the merger wizard?

Morningstar populates the fields in the merger wizard based on the information in its database; sometimes a delay could exist between the time a merger takes place and when it is available in the Corporate Action Warehouse. If the merger data is not present in Morningstar Office when you go to import client data, you can search for the information on the Internet (or from your custodian) and populate the fields in the merger wizard yourself, or you can wait for the information to become available within Morningstar Office.

Here are a few helpful places to search for information on corporate actions:

Chicago Board Options Exchange - http://www.cboe.com/tradtool/contracts.aspx
Schwab Performance Technologies - https://schwabpt.com/resources/actions/
You can also search on the merger company's Web site under Investor Relations.

What should I do with the merger transactions if I decide to wait for the information to become available within the merger wizard?

If you decide not to continue with posting the merger transactions due to missing information, you should still export all transactions related to the merger into an Excel spreadsheet (for later reference), and then delete these transactions from Office.

When you reconcile this data, you will see out of balances related to the merger. These can be ignored and you can continue with the posting process. These items will remain out of balance until the merger is handled.

If you do not want to continue with the import process while having out of balances, you can delay posting your data until you are able to use the Merger/Exchange Wizard and you have reconciled successfully.

Can I post my data if I haven't completed the Merger/Exchange Wizard, or if I have out of balance errors?

You can still post transactions with out of balance errors. The shares out of balance will remain out of balance until the correct transactions are generated to achieve the correct number of shares in the account.

What if Morningstar's Effective Date is different from my custodian's?

Morningstar uses the date the merger took place as the Effective Date for the corporate action. All generated transactions are given this date. Sometimes you will see a different date listed at the custodian for these transactions due to processing differences. This field is editable within the Merger/Exchange Wizard if you want to change it.

What if this corporate action affects multiple accounts and I don't want to enter the Cash-in-Lieu amount individually for each account later?

The price needed for the Cash-in-Lieu field in the merger wizard can be calculated using the following steps:

Pick the account with the largest number of shares that received a Cash-in-Lieu transaction.
Multiply the original number of shares times the share exchange ratio. This results in the total number of shares for the new security.
Use the amount from the Cash-in-Lieu transaction and divide by the fractional share from the new security (be sure to use the entire number after the decimal place).
Enter this price in as the Cash-in-Lieu price. Be sure to use all of the trailing decimal places.

You will need to verify the transactions afterwards for accuracy. Be sure the Net Amount and Gross Amount fields for the transactions have only two digits after the decimal, as this could affect your Cash balance. This can be done by clicking in these fields; any additional digits beyond the decimal will be displayed.

What if I have a Cash out of balance for more than the Cash-in-Lieu amount?

This usually means the Cash-in-Lieu has been accounted for twice. You generated a Sell transactions for the fractional share using the Merger/Exchange Wizard, but the custodian also recorded a Cash-in-Lieu transaction. The custodian usually sends this transaction as a Distribution for the new security, or a Deposit into Cash (Example: Fidelity sends the Cash-in-Lieu as an out of pocket deposit. TDA and Schwab send them as distributions.) If you have not posted this transaction, go to the Transactions blotter and look for the transaction sent from the custodian. Note: You can sort the Account Number column by double-clicking on that column header, or you can search by account number using the Search for functionality at the top left of the screen.

Delete the Cash-in-Lieu transaction. If it shows as a Distribution, delete that item. (Morningstar automatically deletes the offsetting Cash transaction.)

If the transaction came in as a Deposit into Cash, verify that the transaction is not linked to any other transaction by ensuring the Offsetting Cash Security field is blank, and then delete it. Be sure not to delete any Money Market transactions.