Corporate actions are events initiated by a company that affect the securities (equity or debt) issued by the company. There are three categories of corporate actions:
For firms that have chosen to let their clients vote their own proxies: Clients will receive email notifications at the email address provided to us for all applicable corporate actions. Notification emails include links to review materials and vote.
These emails are generally consolidated, with all of the proxy notices for a single day in one email, and all of the corporate notices for a single day in another email, for each client email address on file. If a client were to have more than 10 proxies or 10 corporate notices in a day, then they would receive additional consolidated emails.
Copies of these client notices are not provided to advisors, except for Voluntary Corporate Actions notices posted to your Advisor Message Center on our advisor site. We do not provide notices for upcoming dividends.
For firms that have chosen to vote for their clients: Advisors under firms that have the right in their advisory agreement(s) to vote on behalf of clients, and have requested to be setup to vote for all of their clients with our proxy voting provider, will be notified on the proxy voting provider’s website (ProxyEdge) when proxy and corporate notices are available. Note that a firm cannot elect to vote for some but not all of their clients.
Note that Voluntary Corporate Actions will be posted under the Corporate Actions link on the logged-in home page of our advisor site, and there will be a Corporate Activity Icon next to applicable client accounts, Voluntary Corporate Actions will not be on the ProxyEdge site. We do not provide notices for upcoming dividends.
If you would like to vote for your clients, using ProxyEdge by Broadridge, please email us at support@folioinstitutional.com and provide the following information for the one point of contact who will manage voting for your firm (i.e., Voting Party/ProxyEdge administrator):
After we receive your information, we will configure voting for all of your firm’s client accounts to be voted through ProxyEdge and you will be contacted by Broadridge to setup your ProxyEdge administrator account and receive training on how to use the application.
Note that if you choose to vote for your clients then you are choosing to vote for all of your clients for all of their positions that are held by us from the time that we complete the setup for your firm, until that setup is terminated.
Your firm’s ProxyEdge administrator can add additional representatives of your firm to that website, and each representative can configure their email notifications on the ProxyEdge site.
Corporations often take actions that affect their stockholders. The following list defines each type of corporate activity.
A cash dividend occurs when a corporation decides to distribute some of its earnings or profits to shareholders in the form of a cash payment. If you own securities in a corporation that declares a cash dividend, you will not receive a notice in advance from us.
The day the dividend is paid, the following will occur:
Cash dividends of less than $1 are not automatically reinvested in the securities that paid them. Instead, we credit the cash portion of your account.
A stock dividend occurs when a corporation pays a dividend in security rather than cash. The day the dividend is paid, the stock dividend will be added to your total share value.
With an optional dividend, the corporation gives its shareholders the option of receiving the payment in cash, security, or some combination of both.
If you receive an optional dividend for a security held by us, you will not receive advance notice from us. The dividend will be paid in the following ways:
If you receive an optional dividend for a security not held in a sub-account, we will notify you by email and ask you to indicate how you would like to receive your dividend.
When a stock splits, a corporation increases its shares outstanding. As a result, the share price usually decreases.
If you own security in a corporation that authorizes a split, we will notify you by email. The number of shares you own will be adjusted on the date the split goes into effect.
When a reverse stock split occurs, a corporation is decreasing its outstanding shares. As a result, the price per share usually increases.
If you own security in a corporation that authorizes a reverse split, we will notify you by email. The number of shares you own will be adjusted on the date the split takes effect.
A merger occurs when two or more companies combine to form one company. A restructuring occurs when a company internally reorganizes, possibly dividing into separate companies.
If a merger or corporate restructuring applies to a security you own, we will notify you by email. If a ticker symbol changes, we will automatically update your holdings. Similarly, if any shares are exchanged, we will automatically make the adjustment.
A rights offering occurs when a publicly traded company gives its current stockholders the right to maintain proportionate ownership before offering new shares to the public. For example, assume you own 2% of a company’s outstanding shares. The company decides to issue new shares and issues a rights offering. You are given the right to purchase 2% of the new shares before they are offered to the general public.
If you are offered rights, we will notify you by email. The email will provide instructions for choosing the following options on our site:
If you choose to exercise the rights, you must have the cash available in your account to buy the shares.
A tender offer is an offer to buy shares of one security in exchange for shares of another security, cash, or a combination of both.
If you receive a tender offer, we will notify you by email. The email will provide instructions for choosing the following options on our site:
A proxy is a written document that allows a shareholder to vote without attending a company meeting.
If you receive a proxy statement, we will notify you by email. The email will provide instructions for voting.