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Cancellation of listing


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17 minutes ago, Pierotlunaire said:

What happens to a CFD position if the underlying share is suspended and the shareholders then pass a resolution cancelling the listing?

Thanks for your post. 

If the underlying is suspended for a short period of time, due to limit up/down, you will not be able to trade until it's open again. 

If you're referring to stock going bust. Normally the large decrease will suspend the stock being traded. From there your position will be frozen. You will not be able to close the position. If the outcome is that that each company share is worth zero CFD clients take the closing price at 0. Please note these will not settle until the company have released an official statement confirming the value of the shares to share holder.

If the situation is that the company is relisting on a different exchange there would be two outcomes. One would be that they relist on an exchange we offer, in which case we would close the position you have an reopen you in the new line.

If the shares are being relisted on an exchange we don't offer we will reach out to you about your options. Some options before have been transferring to another broker or you realising the p/l before the relisting but this can differ in different scenarios. 

I hope this helped. 

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Thanks. I’m aware of those scenarios, but I have a slightly more unusual one in mind.

BST is a company which was CFDable on IG. It is currently suspended following a fund raising which fell apart due to Cvd19. Might get bid for, which again is a straightforward scenario. But a more complex one is that there is a private fund raise to take it forward to a M&A exit but the funders want to cancel the listing, and the board has already proposed a special resolution to cancel the AIM listing (on grounds of disproportionate cost).

So the scenario is suspension remains until the listing is cancelled concurrent with a private fund raise, and the share remains private for say 12 months until a company sale happens. Easy if you hold physical stock, but what about a CFD?

do you close the position at the moment of listing suspension (and at what value) or do you do something else? 

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