Currently on the Sharesies platform, shareholders can take part in:
mandatory corporate actions (for the investments they hold)
some voluntary corporate actions for NZX-listed investments.
Shareholders can't currently take part in voluntary corporate actions for US and ASX-listed investments.
What’s a corporate action?
A corporate action is when a listed company makes an announcement or decision that directly affects the company and its shareholders. Corporate actions are split into two main categories: mandatory and voluntary.
Mandatory
If a corporate action is mandatory, shareholders generally don’t need to do anything to take part—it happens automatically. Here are the mandatory corporate actions supported on the Sharesies platform:
Dividends—when companies and funds make a profit, they might decide to give some of that profit back to shareholders in the form of dividend payments.
Mergers—when two or more companies combine to form one larger company. Usually, shareholders of one company will have their shares swapped out for shares in the other.
Acquisition—when a company buys another company. The second company might cease to exist entirely, or it might operate on its own, but give all its profits to the first company.
Share split—when a company arranges an increase in the number of shares its shareholders own by dividing each share, then reducing the price per share.
Reverse split—when there’s a consolidation of the number of shares owned by an investor by adding shares together, then increasing the price per share.
Bonus issue—when a company or fund gives existing shareholders new shares at no charge.
Voluntary
If a corporate action is voluntary, shareholders can choose whether they take part. On the Sharesies platform, you can only participate in voluntary corporate actions for companies listed on the NZX, provided we make them available.
Examples of voluntary actions include capital raises like rights offers, share placements, and share purchase plans. These offers give shareholders the opportunity to buy more shares in the company, usually at a discounted price.
Eligibility
Common eligibility criteria for participating in a corporate action through the Sharesies platform include things like needing to have held shares in the company on the record date, and having your registered address on the Sharesies platform in an eligible jurisdiction for the offer. We’ll let you know what this is for the specific offer, however, typically your address will need to be in New Zealand or Australia.
Record date
When a corporate action is announced, the company will specify a record date which determines the investors who can participate. Generally, if you own shares on the record date, and if the corporate action is available through the Sharesies platform, you can take part.
In order to own shares on a record date, you’ll generally need to have placed an order at least two business days before the record date. This is because it usually takes two business days after the day your order is filled for you to technically own shares (this is referred to as ‘T+2 settlement’). Your order must be settled by the record date for you to be eligible.
If you're eligible to participate in a corporate action on the record date, you can usually sell your shares in the company without it affecting your eligibility for the offer.