Indicates whether a preferred security contains a provision permitting the holder to convert the preferred security into another security or cash. What the preferred securities may be converted to and the specified rate of the conversion will be indicated in the security’s offering documents, usually it is some percentage of common stock shares of the issuer. Usually conversion is only permitted anytime after a predetermined date. Most convertible preferred securities are exchanged at the request of the holder, however certain preferred securities may contain provisions dictating how and when the option to convert may be exercised. Provisions may exist that allow the issuer to force conversion of the preferred security. Mandatory convertible securities require conversion, usually according to a predetermined schedule.