An asset servicing instruction is a message that an account holder sends to its custodian, telling it how to act on an event affecting securities in the account. The most common kinds are the election instruction, which states the option chosen in a voluntary corporate action such as a tender offer or rights issue, and the proxy voting instruction for a shareholder meeting. Tax-related instructions, such as a request for treaty relief, also fall under the heading.
An instruction identifies the account, the security, the event reference, the option selected and the quantity it applies to. It must reach the custodian bank before its election deadline, which falls ahead of the market deadline. The custodian checks it against the holding, usually blocks the securities concerned, and forwards it along the chain. Handling these messages is a central part of asset servicing.