Rights Issues

[Guest raredragon]

My first post, not sure how this board works but was recommended to use it following a request for information from IG helpdesk.

 

My question, can someone tell me how it works if I have an open CFD position (Tlw) and the company decides to have a rights issue.

 

As I wish to participate what happens next? Any help would be appreciated.

[Guest ChrisWa]

Hi 

 

In this community you can start a topic of discussion surrounding the markets or ask questions about functionality of the platform.

 

In answer to your question, a rights issue on a CFD account will react the same as the underlying market, in other words if you held the shares physically in a share dealing account.

 

To clarify, if you held 1000 shares and there is a rights issue ratio of 2 for 1. You would have the right to take up 2000 shares at the subscription price, you will also have the ability to trade out of the rights.

 

The only time this will be different to holding the shares physically will be when you hold a short position. If you held a short position until expiry there is the risk of being taken up against, meaning the Rights position will be converted into the underlying position at the subscription price going short. 

 

To take up rights on the account you would just need to contact us either over the phone or via email to confirm your instruction.

 

I hope this answers your question. If you have any further points you wish to discuss please contact us.

 

Thanks!

Chris

[Guest knolles]

Does IG list companies separately offering  rights issues or does one have to watch for company announcements

[Guest ChrisWa]

Hi 

 

We do not list companies who are offering Rights Issues or going through any type of corporate action.

 

If you were an existing holder of the company on the ex date, then you would be informed about an upcoming Rights Issues via an email from our corporate actions team.

 

If you are not a holder of a company that is issuing a Rights Issue then you would have to keep up to date with company announcements. 

 

If you are wanting to keep up to date with news on shares, please click here for news and earnings reports from our analysts.

 

Thanks!

Chris