Fractional Shares

The ACATS record layouts allow a submitter to enter a quantity that includes fractional shares for all asset types. However, Fund/SERV is the only settlement location that can process fractional shares. For assets settling at locations other than Fund/SERV and IPS, ACATS creates receive and deliver instructions, called R&D Instructions, for the entire asset share quantity, including the fractional share. For example, if a deliverer submits an equity (Asset Category = EQU) that is eligible for settlement in CNS with a quantity of 500.2 shares, ACATS issues the receive and deliver instruction with a quantity of 500.2 shares. Even though the asset is eligible for CNS, ACATS issues the receive and deliver instruction, instead of sending the asset to CNS, because the transfer has a fractional share in its quantity.

The industry best practice says that a deliverer should sell off the fractional share before transferring the asset and only transfer a round lot.