We get a lot of questions surrounding corporate events (also known as corporate actions or important notifications). Where possible we’ll notify you as and when these happen on your investments.
Once logged into your account you can find any corporate event either past or present by clicking ‘Account Management’ and then ‘Important Notifications’.
We’ve set out to answer your most frequently asked questions on corporate events below:
When a rights issue takes place, shareholders are given the option to purchase additional shares at a discounted price.
If you choose take up these rights then you'll be allocated new shares on receipt of your payment and completion of the event. These shares will become ordinary shares and will be tradeable at the current market price.
By not taking up the rights you will not lose any shares, rights are offered by a company at a discounted price in addition to your existing shares.
Please note: while you won’t lose any existing shares your share holding will become more diluted as there will be more shares on a stock market.
When a company announces a rights issue, holders of the stock will be issued ‘nil paid rights’ which each represent a ‘right’ to buy a new share.
As these ‘nil paid rights’ are tradable on the stock market, they are apportioned a value using the book cost of your total share holding.
If you choose to take up your ‘rights’ and purchase additional shares, the new shares will be given a book cost which includes both the discounted offer price you paid and the stock market value of the nil paid rights.
This means that the company is proposing to cancel or has cancelled the listing of its shares on the stock market.
We will contact you by email or letter with further details if this happens to any of your investments.
Please note: we do not send out communications when a company’s stock is suspended however, if we receive any information such as a notice of administration then we will contact you.
Takeovers are reliant on shareholders accepting an offer by a bidding company. The offer will usually consist of money and/or shares in their company in exchange for your existing shares. The company will need to reach a pre-agreed percentage of total shareholders to agree to their offer before they can declare their takeover bid as 'unconditional in all respects’.
I had accepted the offer before it was 'unconditional in all respects'
If you agreed before the offer was declared ‘unconditional in all respects’, you will receive your cash 10 working days from when we instruct the company's registrars.
Please note: for each acceptance we combine your instructions with those of other customers so it will be approximately 10 working days from the advice date of the event.
I did not accept the offer
Once the offer is declared 'unconditional in all respects' we will write out to you and give you the opportunity to agree to the terms of the takeover.
If you agree to the terms of the takeover you will usually receive the money within ten working days from the date we receive your instruction. This money will be transferred into your share dealing account.
If you’d like to register for this service you’ll need to contact us on 03457 22 55 25.
We will forward you notifications for all companies where you hold stock as and when they are received by Halifax Share Dealing.
You can choose to either attend the meeting yourself or send us your voting instructions which we will submit on your behalf.
A dividend is a sum of money that a company pays out to its shareholders..
If a company announces it is going to pay a dividend, it will also announce a date, known as the ‘ex-date’, which is used as a deadline to mark whether a shareholder is entitled to a dividend payment.
You must hold the stock when the market opens on the dividend ex-date to be entitled to a dividend payment.
We do not currently offer the option of ‘Scrip’ dividends. We do however offer our own ‘Dividend Reinvestment Plan’ (DRIP) which provides you with the option of buying stock using your dividend payments.
Dividend reinvestment is charged at 2% (maximum £12.50) plus 0.5% UK stamp duty.
For the majority of UK stocks we will credit the dividend to your share dealing account on the dividend payment date, this is provided we have received the payment and related documentation from the registrar.
Unit Trusts and foreign dividends tend to take longer to be credited as we have to wait for external custodians to release payment. In the case of foreign dividends this is usually 1 working day after the dividend pay date, and in the case of Unit Trusts this can be up to 1 week after pay date.
There are a number of reasons that your dividend may not have reinvested:
1) Did you select ‘Re-invest’ as your ‘Dividend Handling Option' at least 24 hours before the dividend payment date?
2) Was the dividend over £1.00 in value, and does the dividend total enough to purchase at least 1 share on the stock market?
3) Do you still have the stock in your share dealing account that the dividend was paid on? (No reinvestment can take place if you don’t have a holding.)
4) Is the stock eligible for reinvestment? Examples of stocks not eligible for reinvestment include foreign stocks and stocks that require a set investment amount such as bonds and gilts.
5) If the stock is being held in an ISA, is this ISA active?
6) Do you have any outstanding charges on your share dealing account?
7) Have you passed all relevant ID and money laundering checks?
If none of the above apply to you then please call us on 03457 22 55 25.