Corporate Actions for Fractional Shares

In the event of a stock split, you may receive fractional shares of security depending on the terms and conditions of the split.

For example, if you held 10 shares of a security that experienced a 1:7 reverse stock split then the quantity of your position would be adjusted into 1.42857 shares. If you hold an equity position with fractional shares included and the underlying security pays out a cash dividend you would be eligible to receive a dividend payment for the fractional shares held. However, for shareholder rights only whole shares would be eligible for proxy voting and the fractional piece of the position will not have any voting ability.

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If you have fractional shares positions in a company that is undergoing a stock split or reverse split, the shares number and price of the position will be affected. For example, you have 1.5 shares of XYZ at $10 per share. If XYZ performed a 2 for 1 (2:1) forward split, you'll have 3 shares of XYZ at $5 per share. if XYZ performed a 1 for 2 (1:2) reverse split, you will have 0.75 shares of XYZ at $20 per share.

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The shareholder of fractional share is able to receive dividends that are proportionate to the percentage of the share they own.