Corporate Actions

 

 

Corporate Actions

Right Issues

Clients holding Stock positions will receive rights and can choose to sell the rights or subscribe to new Stocks. 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.

*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

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.

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.

Optional Dividends

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.

Stock Dividends

Additional Stocks are allocated on the Ex-date for value on the Pay Date.

Bonus Issues

Additional Stocks are allocated on the Ex-date.

Stock Splits / Reverse Stock Splits

New Stock positions are allocated on the Ex-date.

Tender Offers

Clients holding Stocks in their portfolio will have the possibility to tender.

Mergers & Mergers with Elections

For mandatory Mergers there are different outcomes:

  1. Cash (distributed on Pay-Date)
  2. Stocks (distributed on Ex-Date)
  3. Mix of Cash & Stocks (distributed on Ex-date)

For mergers with elections, clients have the possibility to elect prior to the deadline.

Deletion of Open Orders as a Result of Corporate Actions

The day before a Corporate Action event is scheduled to take effect (the Ex-date), open orders are deleted for certain event types.

The following details the rules of behavior:

Event Type​ ​Never delete orders ​Always delete orders ​Rule defined below
Tender offers​ ​x
Stock splits​ x​
Reversed stock split​ x​
Bonus issues​ x​
Mandatory Mergers​ x​
Spin offs​ x​
Ticker changes​ x​
De-listings​ x​
Cash dividends​ ​x
Stock dividends​ x​
Optional dividends​ x​
Right issues​ x​
 

For dividends and rights issues, all open orders for the given instrument will be deleted if the change in the market price is calculated to be over 20% due to the Corporate Action event.

New Positions in non-online traded Instruments

Sometimes a Corporate Action involves an instrument that is not tradable online with Saxo Bank.

Under those circumstances, the procedures are as follows:
 
Positions in new instruments that are not tradable online, assigned as a result of a Corporate Action, are booked to the clients account. The instrument will be added to the client account for reporting purposes.

Fractional Compensation

A fractional stock is less than one full stock, and can arise as a result of a Corporate Action entitlement calculation.

For the following Corporate Actions, Saxo Bank pays cash compensation for fractions whenever fraction compensation is applicable:

  • Stock splits
  • Reverse stock splits
  • Optional dividends on stock positions
  • Mergers

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.

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.

Updated 14th June, 2012