Corporate actions - Frequently asked questions
Here we seek to address some frequently asked questions about corporate actions.
If you're unable to find what you're looking for, please do not hesitate to phone our Investment Helpdesk on 0117 900 9000 or email us.
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.
What do I need to do if I hold shares in a company which is undergoing a corporate action?
You should await contact from Hargreaves Lansdown. We will send you an explanation of what is taking place and how it affects you. If you receive any corporate action documents directly from a company for shares which you have recently transferred into a Hargreaves Lansdown account, please contact us.
For certain corporate actions you may be required to make a decision. If this is the case then we will indicate which options are available and how you can elect for your chosen option. We will also confirm the date by which your response must be received.
How will I receive corporate action information from Hargreaves Lansdown?
If you have signed up for our paperless service, notification of corporate actions will be sent to your online secure inbox which you can access when logged into your account. You will also be sent an email alert to let you know that you have a new message to read. If a deadline applies to the corporate action this will be made clear in the email alert.
If you have not signed up for the paperless service you will receive a letter in the post. However, if a deadline applies to the corporate action we may also email you (if you have registered an email address with us) to alert you of this.
In very rare circumstances, for example where it may be impractical to send a letter in the post or the corporate action does not require a response from you, we may send notification to all clients by email or other medium, such as via the Investment Times.
Does Hargreaves Lansdown charge for administering corporate actions?
No, it is free to participate in corporate actions through Hargreaves Lansdown.
A share in my ISA is subject to a corporate action. Does this have any additional implications?
Corporate actions on holdings within ISAs will be processed in the same way as those in other accounts with some key exceptions though:
- Subscribing cash
Some corporate actions require you to make a cash payment in return for a new quantity of shares, e.g. rights issues, open offers, exercise of warrants. If you want to hold the new shares within a ISA you must fund this purchase from cash held within the ISA. This may mean using an existing cash balance or selling shares from within the ISA to raise the cash. Alternatively new money can be added to a ISA subject to your annual ISA subscription allowance.
If you are unable to fund the purchase from cash within a ISA you will be given the opportunity to take up new shares outside of the ISA. To do this you may use cash held outside of the ISA, and on completion of the offer the new shares will be transferred out of the ISA. The shares can be transferred into a different Hargreaves Lansdown Nominee Account (or HL Fund and Share Account) or you can request a share certificate.
- Ineligible investments
HM Revenue & Customs have strict guidelines on what investments can and cannot be held within an ISA. Full details can be found on the HM Revenue & Customs website.
Examples of non-qualifying investments include warrants, with certain exceptions. On occasion a corporate action may result in you being credited with such an investment in your ISA.
Where such a situation arises HM Revenue & Customs regulations stipulate that the holding must be removed from the ISA within 30 calendar days. To do this you may sell your holding and retain the cash in the ISA, or transfer the shares out of the ISA. The shares can be transferred into a different Hargreaves Lansdown Nominee Account (or HL Fund and Share Account) or you can request a share certificate.
In the event that you are required to take action in respect of a holding in an ISA you will be notified in writing.
Please note that there is an administration fee for issuing a share certificate for a new holding resulting from a corporate action.
I hold overseas stocks within my portfolio. Are there any implications for corporate actions on these stocks?
Due to the manner in which overseas stocks are held and delays in obtaining official communications, and communicating instructions to the custodian of the shares in the overseas market, the time in which to respond may be shorter than for corporate actions on UK listed stocks. Also on occasion it can take longer than the stated time period to receive the cash or new share proceeds.
Some corporate actions may result in you holding a stock which is not eligible to be held in the UK settlement system. In such situations it may be difficult or impossible for Hargreaves Lansdown to trade the resulting stock. In such an event, and where possible, you will be given written notice by Hargreaves Lansdown.
In some instances UK residents may not be eligible to take part in corporate actions on overseas stocks. In certain cases restrictions on overseas holders are applied.
Any cash proceeds that are received in a foreign currency will be converted to Sterling at the prevailing exchange rate upon receipt.
As information is occasionally scarce with overseas corporate actions, at certain times it may not be possible to contact you before the event reaches completion.
How do I make an election?
How do I give Hargreaves Lansdown my instruction?
If you need to make a decision in respect of a corporate action there are two options available to you:
- Send your instruction by post to Hargreaves Lansdown at One College Square South, Anchor Road, Bristol, BS1 5HL. A prepaid envelope will be provided to assist this.
- Send us your instruction online by logging onto your account and sending us an electronic instruction using the 'online election' facility. Please note that an instruction by ordinary email cannot be accepted. Electronic instructions can only be accepted from your Hargreaves Lansdown online account.
What should I do if I hold a share certificate for a company undergoing a corporate action?
If you hold a share certificate then your name should appear directly on the company's register of shareholders. As such, you will receive documentation directly from the registrar, detailing the corporate action and the options available to you. Your election must then be sent back to the registrar.
If you hold shares of the same company in both a Hargreaves Lansdown nominee account and in certificated form you will be contacted by both the registrar and Hargreaves Lansdown. Separate instructions (if applicable) must be returned to each.
Why is the Hargreaves Lansdown deadline for elections earlier than the company registrar's deadline?
The company's registrar will set a deadline for shareholder responses to a corporate action and Hargreaves Lansdown must ensure that all the instructions of its clients reach the registrar by this deadline. Therefore the Hargreaves Lansdown deadline will always be before the company registrar's deadline to give us time to process and forward on client instructions.
I have recently transferred a share certificate into a Hargreaves Lansdown account but have received offer documents directly from the company. Do I reply to the company myself or do I send my election to Hargreaves Lansdown?
This is dependent on the type of corporate action. For some events for which an entitlement is calculated on a specific date (such as a rights issue or open offer), you will receive an application form, even if you have subsequently transferred your shares to Hargreaves Lansdown. In such cases if you wish to participate in the offer you must make your application in your own name via the registrar. For other types of corporate actions Hargreaves Lansdown will contact you outlining what action, if any, is required. If you are in any doubt please contact Hargreaves Lansdown immediately.
Can Hargreaves Lansdown advise me on which election option I should take?
No. Hargreaves Lansdown offers the HL service on an 'execution-only' basis. This means Hargreaves Lansdown shall not provide, and you do not expect, personal financial advice about the suitability of an account or any investment you hold within it, and you cannot hold Hargreaves Lansdown responsible for any loss in value of the investments you choose.
What happens if I miss the deadline for returning my election?
If you have missed the deadline set by Hargreaves Lansdown you should contact us immediately on 0117 980 9912. If the company registrar's deadline has passed we will be unable to take any action on your behalf as their deadlines are strict. If there is a default election option then this is what will be taken on your behalf if you miss the deadline.
Can I change my mind after sending you my election?
If you wish to alter an instruction you have sent us please contact us on 0117 980 9912 and we will do our best to accommodate you. If your election has already been acted upon, and forwarded to the company's registrar, this may not be possible.
Do I have to make an election?
No. Some corporate actions are voluntary and by taking no action you are simply not participating. Other corporate actions are mandatory and may or may not have options available. If there are options for you to consider this will be made clear in our correspondence. If you do not reply you will receive the default option, which will be clearly highlighted in our correspondence.
Will Hargreaves Lansdown always have the same default election as the company's registrar?
The company's registrar will often set a default election option for shareholders to be used when no reply is received. Hargreaves Lansdown will tend to use the same default option for its clients however there may be occasions when we will set a different default option.
I need to send you a cheque, who should I make it payable to?
If your cheque relates to a HL Fund and Share Account please make it payable to 'HLAM client number'.
If it relates to an ISA account please make it payable to 'HLAM ISA client number'.
If it relates to a SIPP please make it payable to 'HLSIPP / Your Initials & Name.
Please ensure that you write your client number on the back of all cheques sent.
How can I obtain company information?
I've heard that a company is planning a corporate action, when will Hargreaves Lansdown contact me about it?
This will vary, but generally will not be until the company has sent out the official documentation to shareholders. Hargreaves Lansdown will not contact clients as a result of press or market speculation.
If a response is needed from our clients we aim to try to give clients at least three weeks notice. However this is dependent upon the company dispatching the official documentation sufficiently in advance of the deadline.
On some occasions where the corporate action does not materially affect your holding, and no action is required by shareholders, no prior notification will be sent and only a confirmation will be sent after the event.
What do I do if I haven't received information on a corporate action I was expecting to have received by now?
If you believe you should have received correspondence from Hargreaves Lansdown please contact us on 0117 980 9912.
How can I find out why a company has decided to undertake a corporate action?
Explanations are usually given in the original London Stock Exchange RNS announcement, which can be found on the London Stock Exchange website. Alternatively an explanation can be found in the official document issued by the company.
Can I get a copy of the original official company document for a corporate action?
Hargreaves Lansdown will make every effort to obtain a copy of an official document should you require one. To request a copy please contact Hargreaves Lansdown on 0117 980 9912. A copy of a corporate action related official document can usually be viewed on the issuing company's website.
Can I get a company report?
You may request a copy of an annual/interim report direct from a company's registrar. To find out who the registrar for a specific company is please contact us on 0117 980 9912.
A number of annual reports are made available, free of charge, from our online service at http://hl.ar.wilink.com. Alternatively they can be viewed or downloaded from our website, by clicking on the 'share prices & stock markets' tab, entering the name of the stock and clicking on the 'research' section.
In the unlikely event you cannot find the report you desire, many companies now make their annual / interim reports available to download online from the investor relation section of their corporate websites.
How do I attend and/or vote at a company meeting?
If you wish to attend a meeting and vote you can be appointed as a proxy by Hargreaves Lansdown Nominees Limited and attend and vote in respect of your holding held on your behalf by Hargreaves Lansdown Nominees Limited. A request to be appointed proxy can be sent to Hargreaves Lansdown by email or post. Alternatively, if you wish to vote without attending the meeting you can send (by email or post) a voting instruction to Hargreaves Lansdown and your vote will be forwarded to the company.
Can I get shareholder benefits for shares which are in my Hargreaves Lansdown account?
Providing the company in question makes its shareholder benefits available to holders of shares within a nominee service then Hargreaves Lansdown should be able to obtain the relevant benefit. To request a shareholder benefit you must send a written request to Hargreaves Lansdown or alternatively an email or fax.
Please see our detailed guide on shareholder benefits.
Please note that shareholder perks can change frequently and although we will do our best to keep the above list up to date you should not base an investment decision on a shareholder benefit and should check with Hargreaves Lansdown that the benefit is still available before placing a trade.
What happens next?
How do I receive new shares arising from a corporate action?
Any new shares resulting from a corporate action will normally be automatically credited to your Hargreaves Lansdown Nominee Account. In instances where an instruction to move new shares resulting from a corporate action has been received, for example if new shares are to be moved from an ISA to a Fund and Share Account, these shares will be moved to the intended account as soon as is practicable. You will receive written confirmation of this, as opposed to a contract note, which should be retained for your records.
How is cash arising from a corporate action paid to me?
This will depend on whether the cash is paid as a capital or income payment.
- Capital: The cash will be paid into the Hargreaves Lansdown Account from which the cash originated. It will remain within this account, earning interest at the prevailing rate, pending your instruction.
- Income: The cash will be paid onto your income cccount and will be subject to any standing instruction you have given us for that income, i.e. hold on deposit, reinvest or pay out.
Can I reinvest the cash received from a corporate action?
Yes. This can be done online, by post, or by contacting our dealers on 0117 980 9800. The cash can be reinvested from the date it is credited to your account. Frequently we will provide you with a tear-off reinvestment slip when we confirm payment of the cash, which can be returned in the post.
Please note that you’ll need to provide three digits from your Secure Number if you want to deal over the telephone.
Can I withdraw from my account the cash received from a corporate action?
Before you withdraw money by electronic transfer you need to set up a Nominated Bank Account. This can be done online via our secure website, or in writing. For security purposes you will not be able to make a withdrawal for five working days after setting up or changing your Nominated Bank Account.
Online: To withdraw money to your Nominated Bank Account simply log in, select the account you would like to withdraw from, go to the "Cash" section and choose "Withdraw money" from the quick links box. Payment will be made by Faster Payment and there is no charge for this service.
Telephone: Once you have set up your Nominated Bank Account please call our Client Accounts on 0117 980 9801 with your Secure Number to withdraw money from your account.
Post: Please complete and return a Cash withdrawal form.