Corporate Actions

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Corporate Actions

Margin requirements for shares, with an upcoming earnings report and/or corporate and/or other action (collectively, the ‘corporate event’), may increase up to no more than 5 times the normal percentage, 5 business days prior to the corporate event, and may remain in effect after the corporate event at PlusFX’s sole discretion.

During the affected period, new margin requirements will apply for all existing and new trades. PlusFX clients remain fully responsible for monitoring both the required margin of their account(s) and free margin prior, during and post the affected period. As a result of the above, PlusFX clients understand and accept that this may result in their account(s) incurring a margin call and/or stop out.

Dividends

PlusFX reserves the right to increase margin requirements prior to the release of a dividend.
Long Positions – Clients holding long positions on the ex-div date will receive a dividend in the form of a cash adjustment (deposit).
Short Positions – Clients holding short positions on the ex-div date will be charged the dividend amount in the form of a cash adjustment (withdrawal)

ℹ Note: Stock may be offered as a dividend, the dividend amount should be calculated using the share price to determine the cash adjustment (see fractional share adjustments).

Fractional Share Adjustments

In the event the corporate action results in a fractional position, the fractional component may be represented as a cash adjustment independent of the handling for the non-fractional position. The adjustment value will equal the fractional position times the adjusted closing price on the day prior to the ex-date.

Stock Splits

Normal Stock Split

As there is no impact on the company’s market capitalisation the action carried out is to reflect the clients existing share position using the split ratio announced.

Example:

Client bought 100 shares in AAPL at $400, currently trading at $500. AAPL announce a 2-for-1 Stock Split
Client's 100 share position is closed flat
2 New positions are opened for the client, 100 shares each opened at $200, new market price is $250
Client is not affected as equity remains the same as before the Stock split

Reverse Stock Split

Again there is no impact on the company’s market cap and the clients positions need to be amended to reflect the new share price.

Example:

Client bought 100 shares in AAPL at $400, currently trading at $500. AAPL announce a 1-for-10 Stock Split
Client's 100 share position is closed flat
1 new position is opened for the client, 10 shares opened at $4000, new market price is $5000
Client is not affected as equity remains the same as before the Stock split

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