An acronym for trust automatic common exchange security; a hybrid equity security (equity linked security, ELS), that constitutes a trust-originated preferred stock convertible to common equity (common stock). The issuers generally purchase and hold a portfolio of stripped treasury securities maturing on a quarterly basis through the conversion date, while concurrently entering into a forward purchase contract with an existing shareholder of the common stock of the issuer.

Payout distribution takes place on quarterly basis, consisting of the cash received from the treasury securities. Conversion is automatically initiated after a passage of specific period (3 years). Such equity-linked securities generally are not entitled to any dividends that may be offered on the underlying common stock.

This security belongs to a broader type of derivative equity security.