22 Jul 2017 | 4:56 AM
 
Existing Customer

FAQs - Corporate Action

What is Corporate Action?
  A corporate action is an event initiated by a public company that affects the securities (equity or debt) issued by the company. Corporate actions are typically agreed upon by a company's board of directors and authorized by the shareholders. Some examples are stock splits, dividends, mergers and acquisitions, rights issues and spin offs.

To avail the benefit of corporate action, the person should hold his/her shares in demat account on record date and book closure.
   
What is the meaning of Record date, Book Closure and Ex-date?
  Record Date: The registered shareholders of the company are entitled to corporate benefits such as dividend, bonus, rights etc. announced by the company from time to time. Since, the ownership transfer of securities is a continuous process open any time, the company announces cut off dates from time to time and members on the register of shareholders as of these cut off dates are entitled to the benefits. Such cut-off dates are record dates.

In simple term, record date is the cut-off date when registrar freezes the data taken from the depositories for distribution of corporate action.

Book Closure: In case company chooses to close the register of shareholders for registration of transfer during a specified period, this process will be termed as Book closure. All transfer requests received before the commencement of the book closure or on or before the record date are considered for the purpose of transfer.

Ex- Date: The first day of the 'No Delivery' period is the ex-date viz., if there is any corporate benefit such as rights, bonus, dividend etc. announced for which book closure/record date is fixed, the buyer of the shares on or after the ex-date will not be eligible for the benefits while the seller would be eligible for the same.
   
Will a person get benefit of corporate action if he/she sold the same on Ex-date?
  Yes
   
Will a person get benefit of corporate action if he/she sold the same before Ex-date?
  No
   
Will a person get benefit of corporate action if he/she purchases shares before Ex-date?
  Yes
   
Will a person get benefit of corporate action if he/she purchases shares on Ex-date?
  No
   
Where can I check the details of corporate action?
  If company announces any corporate action to its shares holder, then the company declares Book closure or Record date and Ex-Date, the relevant announcements can be tracked from the exchange website namely www.nseindia.com  and www.bseindia.com  after referring the scrip name/code.
   
How will I receive corporate action on my stocks/holdings?
  In case you hold securities on record date in your depository account, you will directly receive the corporate action credits in your depository account or the dividends in your bank account registered with your depository account.

In case you hold securities in margin account on record date, broker will receive the relevant corporate actions credits and transfer to your trading margin account or ledger on receipt basis.
   
How will I know about any rights issue for shares held in margin account?
  In case you hold securities in margin account on record date, broker will receive the relevant corporate actions credits and your relationship manager notifies you.
   
How can I apply for rights issue for shares held in my margin account?
  You can transfer funds to your trading account by following the normal mode of funds pay-in and inform to your relationship manager for applying the rights issue or alternatively you can write to us at wecare@religareonline.com  for any query related to the same.

In case you wish to apply for rights issue, you can apply for a maximum 2 times of applicable rights offer applicable on your holding on record date.

Further, you can sold the shares of right issue only after listing of stated shares on designated exchange..
   
When will I receive the dividend for the stock held in my margin account?
  In case you hold securities in margin account on record date, broker will receive the relevant corporate actions credits and transfer to your trading margin account or ledger on receipt basis.
   
How and when will I receive the dividend for the stock lying in my depository account?
  In case you hold securities on record date in your depository account, you will directly receive the corporate action credits or the dividends in your bank account registered with your depository account.
   
How would I get my bonus shares or other non-cash entitlements?
  In case you hold securities on record date in your depository account, you will directly receive the corporate action credits / bonus shares in your depository account.

In case you hold securities in margin account on record date, broker will receive the relevant corporate actions credits and transfer to your trading margin account on receipt basis.
   
What if I don’t receive dividend in my bank account?
  You shall first verify the bank account details registered with your depository account and in case the same are correct, you need to inform company registrar and claim the same.
Other FAQs
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