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 (e.g., NASD, OTC)

Corporate Actions

From time to time certain actions taken by a corporation – or other issuer of marketable securities – have investment consequences for the clients investment in that issuer’s securities. A few examples of Corporate Actions that will affect the investor’s holdings are:

  • Corporate Name Changes
  • Mergers between two or more entities
  • Tender Offers
  • Distributions of Corporate Earnings
  • Stock Dividends
  • Stock Splits

When the brokerage firm holds in custody for a client an investment in marketable securities that has been subject to a Corporate Action, the firm must ensure that the results of that Corporate Action are properly credited to and reflected in the client’s brokerage account.

Two areas within the brokerage firm’s operations group are typically responsible for the processing of Corporate Action activities. They are:

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