A corporate action is a change initiated by a company that affects shareholders by adjusting the organization's structure of debt or equity.

Corporate actions, such as stock splits or reverse stock splits, mergers, and acquisitions, typically take anywhere from 1-6 business days to fully process. In some cases, it can take a few extra business days to complete. During this time, you may notice that your shares appear as ‘inactive’ before the new shares are added to your account. We do our best to minimize this wait time, but for some corporate actions, we have to wait for our clearing brokers to provide us with the new shares.

Stock splits

A stock split is a corporate action that increases the number of shares in a company while decreasing the share price proportionally.

For example, say you had one share of a stock priced at $10 per share. If the stock underwent a 10-for-1 stock split, you would get 10 new shares for every one share you held previously. As a result, you would hold 10 new shares worth $1 each.

What to expect with your holdings

• Stock splits are automatically processed by our back office. No action is required on your end.
• After the stock split, the number of shares you own will increase. However, these shares will trade at a new, lower share price.
• If you end up owning part of a share due to a stock split, you will be able to sell it in the same way as a regular share.

Reverse stock splits

A reverse stock split (or consolidation) is a corporate action that decreases the number of shares in a company while increasing the share price proportionally.

For example, say you held 10 shares of a stock priced at $1 per share for a total value of $10. If the stock underwent a 1-for-10 reverse split, you would get one new share for every 10 shares you held previously. As a result, you would hold 1 new share worth $10.

What to expect with your holdings

• Stock splits are automatically processed by our back office. No action is required on your end.
• After the reverse stock split, the number of shares you own will decrease. However, these shares will trade at a new, higher share price.
• If you end up owning part of a share due to a stock split, we will automatically convert this partial share into cash. You'll see the value of any partial shares added to the cash balance in your account.

Other corporate actions

There are other types of corporate actions, such as mergers and acquisitions. Our back-office processes all mandatory corporate actions on your shareholdings, so no action is ever required on your end.

Voluntary corporate actions

Some corporate actions are voluntary. This means that you will not participate in the corporate action by default, but if you wish to participate, you can choose to opt-in.

If you'd like to participate in a voluntary corporate action, we would need to receive instructions that you wish to do so 5 business days prior to the deadline.  There is also a processing fee of $50 plus tax which will need to be available in your account.

To let us know that you wish to participate in a voluntary corporate action, please contact our support team. 

Corporate actions and automatic dividend reinvestments

Due to technical limitations, you may not receive automatic dividend reinvestments if a security underwent a corporate action. Instead, you can submit a fractional order. Our team is working to resolve this issue.