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What is a corporate action?

A corporate action is any event which results in material changes to a stock. In its strictest sense the term refers to any event which affects the number of shares in issue. This would include events such as takeovers, bonus issues, rights issues and consolidations. These actions will generally change the number or percentage of a company's shares you hold.

In practice a corporate action will refer to a much broader spectrum of activities undertaken by companies and which have a significant influence on its shareholders. This can include name changes, dividends, liquidations and more.

A corporate action will usually be decided upon by the company's board of directors, and will usually require approval by the company's shareholders.

For a list of corporate action types and descriptions please see our glossary of terms.

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