Corporate Actions

 

 

 

 

Corporate Actions

Rights Issues*

On Stock Positions: Clients will receive rights and can choose to sell the rights or subscribe to new shares. If Saxo Bank has not received a response from clients by the reply deadline date stipulated by Saxo Bank, the Bank will if possible, sell the rights on behalf of our clients before they expire. If the rights are non-tradable, they will lapse and become worthless. The proceeds from the sale will be distributed to our clients, less standard commission for the account. The reason the Bank carries out this action is to prevent rights from being worthless when they expire.
 
On CFD Positions: New positions in the original instrument are granted and booked according to the ratio and the price of the underlying rights issue on the Effective Date (Ex-date), with the value date as payment date. No election required.
 
*Australian Listed Events
For certain event types including but not limited to Non Renounceable Rights Distributions, Subscription Offers, Entitlement Offers, Rapid Offers, Retail Offers, Australian Listed Companies have the right to reduce entitlements to zero in certain circumstances and Saxo Bank will therefore only be booking entitlements to clients on the Payment Date.
 
Note that Since March 2009 it is the policy of the ACSA (Australian Custodial Services Association) not to offer Share Purchase Plans Events (SPP) to underlying beneficial owner clients and thus Saxo Bank cannot participate in such events.

Cash Dividends

On Stock positions: Cash dividends are booked on the Ex-date reflecting the market price movement on the Ex-date, but the actual value of the payment will be settled on the Pay Date. Dividend payments from stock positions will be credited to the clients account with any applicable standard withholding taxes deducted. Saxo Bank cannot currently support or offer preferential withholding tax rates that may be available due to residency or legal status.
 
On CFD Positions: Cash adjustments are booked on the Ex-date reflecting the market price movement on the Ex-date, but the actual value of the payment will be settled on the Pay Date.
 
Dividends on index trackers: When any underlying stock that is part of an Index CFD goes ex-dividend, the Index CFD will be price adjusted to reflect this dividend. The weighted proportion of the applicable dividend within the Index CFD will be credited to the client's account for long positions and debited for short. Please note that the DAX30 is a Total Return Index, meaning the index is automatically adjusted for dividends.
 
Index Dividend = Share Dividend * Shares in Index / Index Divisor*.

* Divisor: an amount used to stabilise the index value when its composition changes. The sum of all index members' prices is divided by the divisor to achieve the normalised index value. The divisor is adjusted when capitalisation amendments are made to the index members, allowing the index value to remain comparable at all times. To prevent the value of an index from changing due to such an event, all corporate actions that affect the market capitalisation of the index require a divisor adjustment to ensure that the index values remain constant immediately before and after the event.

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Depositary Receipt fees

It is standard practice for US depositary receipts to charge an annual administration fee up to USD 0.02 per share depending on the issuing depositary bank. The intent of the fee is to cover costs for the banks that take on the operational processes necessary to issue and trade the depositary receipt line. Typically the fee is deducted when dividend payments are made, however, in case the depositary receipt does not pay a dividend or did not include the custodial fee in their dividend events, the fee will be administered through fee-only events.
The dividend fee is stipulated in the Deposit Agreement between the depositary bank and the company based upon industry standards. The Deposit Agreement is filed with the SEC and is readily accessible by the public.
The fee per depositary receipt is not dependent on the total amount of dividend being paid but the amount of shares held.

Stock Dividends

On Stock positions: Additional stocks are allocated on the Ex-date for value on the Pay Date.
 
On CFD Positions: CFDs are allocated on the Ex-date for value on Pay Date. Clients with short positions will be debited and clients with long positions credited.

Optional Dividends

On Stock Positions: The default payment form is cash. However, clients can elect to receive stocks. The stocks will be allocated once the reinvestment rate is confirmed for the value Pay Date.
 
On CFD Positions: Cash adjustments are booked on the Ex-date reflecting the market price movement on the Ex-date, but the actual value of the payment will be settled on the Pay Date.

Bonus Issues

On Stock positions: Stocks are allocated on the Ex-date.
 
On CFD Positions: CFDs are allocated on the Ex-date. Clients with short positions will be debited and clients with long positions credited.
 

Tender Offers

On Stock Positions: Clients will have the possibility to tender.
 
On CFD Positions: Clients will not be given a choice to tender.

Mergers & Mergers with Elections

On Stock Positions: For mandatory mergers, clients are paid cash or new stocks on the Ex-date. For mergers with elections, clients have the possibility to elect prior to the deadline.
 
On CFD Positions: For mandatory mergers, clients are paid cash or new CFDs on the Ex-date. Clients will not have the possibility to vote on mergers with elections. The default term will be elected on behalf of the client. Clients with short positions will be debited and clients with long positions credited.

Stock Splits / Reverse Stock Splits / Spin Offs

On Stock Positions: Stocks are allocated on the Ex-date.
 
On CFD Positions: CFDs are allocated on the Ex-date. Clients with short positions will be debited and clients with long positions credited.

Special Corporate Action Events

Special and infrequent Corporate Actions that do not come under the descriptions above may occur. Saxo Bank will handle such Corporate Actions in the best interest of the client to the extent that time and operational procedures will allow.

Taxes and Fees on Corporate actions

Taxes and fees may also occur on other corporate action other than cash dividends such as fee on a stock dividend or tax on a merger. When such taxes and fees occur Saxo Bank will debit the client’s account accordingly.
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Saxo Capital Markets South Africa is an authorized Financial Services Provider and regulated by the Financial Services Board, registration number 40983. Registered address: The Place, 1 Sandton Drive, Sandown, Johannesburg, South Africa.  

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