Shareholders may receive subscription rights when a company plans to raise capital through a rights issue. A rights issue allows shareholders to buy new shares of the company at a predetermined subscription price, usually lower than the current market price. Investors who are eligible to receive the rights will receive them in their account before market opening on the ex-date, the cut-off date of stock ownership to be eligible to receive the rights, or the first trading day, if applicable.
Companies can issue renounceable rights, which allows investors to trade the subscription rights on the exchange. In this case, investors who do not have shares in the company can trade the subscription rights and/or participate in the rights issue. Companies can also issue non-renounceable rights, in which case investors cannot trade the subscription rights on any exchange.
If you have received rights from a rights issue or bought rights on the exchange, please be aware that if you do not close your position on or before the last trading day or exercise your rights before the deadline, the rights will usually expire worthless.
DEGIRO will inform clients who have received rights from a rights issue via e-mail, including the details of the corporate action and instructions on how to subscribe to the rights. If you received rights and did not receive an e-mail from us, or if you have a related question, you can contact our Corporate Actions team at ca@degiro.ie.
For more information on corporate actions, such as rights issues, you can consult the relevant company’s Investor relations page. Please note that a subscription deadline at DEGIRO may differ from the market deadline mentioned in the right issue’s prospectus.