Capital Return Eligibility - Trade date vs. Record date

[Fiat_23]

Which date counts towards determining return of capital? The actual trade date/s or when Computershare records it on their sub-register? What's the actual rule/regulation regarding this?

This example relates to MRE shares.

I bought MRE shares on 24th August 2010 then sold all of them on 1st September 2010. MRE is returning capital to shareholders and the record date for determining the MRE shareholders entitled to participate in the return of capital is 25th August 2010.

Computershare has advised me I won't be getting return of capital for my shares as the transaction date on their sub-register is 27th August 2010 - see their email below.

That is unfair and unjust. Is there anything I can do about this?

--------------Email from Computershare-----------

"
Thank you for your email enquiry.

CHESS transactions

We wish to advise that as your securityholding is broker sponsored, details of your transactions are held on the CHESS sub-register, not on the issuer sponsored sub-register maintained by Computershare.

It can take up to four trading days for transactional information from CHESS to appear on the register.

CHESS transactions made less than four trading days before the record date cannot be guaranteed to come onto the register before the record date.

Securities not eligible

We advise that your securities came onto the register on 27/08/10, two days after the record date (25/08/10) for the capital return.

The securities purchased in this transaction will not count towards your entitlement in the capital return.

If you have any further queries, please contact us. "

 

[skyQuake]

Which date counts towards determining return of capital? The actual trade date/s or when Computershare records it on their sub-register? What's the actual rule/regulation regarding this?

This example relates to MRE shares.

I bought MRE shares on 24th August 2010 then sold all of them on 1st September 2010. MRE is returning capital to shareholders and the record date for determining the MRE shareholders entitled to participate in the return of capital is 25th August 2010.

Computershare has advised me I won't be getting return of capital for my shares as the transaction date on their sub-register is 27th August 2010 - see their email below.

That is unfair and unjust. Is there anything I can do about this?

--------------Email from Computershare-----------

"
Thank you for your email enquiry.

CHESS transactions

We wish to advise that as your securityholding is broker sponsored, details of your transactions are held on the CHESS sub-register, not on the issuer sponsored sub-register maintained by Computershare.

It can take up to four trading days for transactional information from CHESS to appear on the register.

CHESS transactions made less than four trading days before the record date cannot be guaranteed to come onto the register before the record date.

Securities not eligible

We advise that your securities came onto the register on 27/08/10, two days after the record date (25/08/10) for the capital return.

The securities purchased in this transaction will not count towards your entitlement in the capital return.

If you have any further queries, please contact us. "

T+3 settlement means the shares you bought on the 24th Settle on the 27th. ie you have to get it before the EX-Date.

 

[skc]

Which date counts towards determining return of capital? The actual trade date/s or when Computershare records it on their sub-register? What's the actual rule/regulation regarding this?

This example relates to MRE shares.

I bought MRE shares on 24th August 2010 then sold all of them on 1st September 2010. MRE is returning capital to shareholders and the record date for determining the MRE shareholders entitled to participate in the return of capital is 25th August 2010.

Computershare has advised me I won't be getting return of capital for my shares as the transaction date on their sub-register is 27th August 2010 - see their email below.

That is unfair and unjust. Is there anything I can do about this?

--------------Email from Computershare-----------

"
Thank you for your email enquiry.

CHESS transactions

We wish to advise that as your securityholding is broker sponsored, details of your transactions are held on the CHESS sub-register, not on the issuer sponsored sub-register maintained by Computershare.

It can take up to four trading days for transactional information from CHESS to appear on the register.

CHESS transactions made less than four trading days before the record date cannot be guaranteed to come onto the register before the record date.

Securities not eligible

We advise that your securities came onto the register on 27/08/10, two days after the record date (25/08/10) for the capital return.

The securities purchased in this transaction will not count towards your entitlement in the capital return.

If you have any further queries, please contact us. "

Look out for the information called "Basis of trading". In the case of MRE, a "XE" would be displayed to indicate that it is trading "ex-entitlement". i.e. entitlement to capital return. As SkyQ says, this is t+3 before the record day.

You should be able to get such information from a proper broker / data provider.

Nothing unfair / unjust about it. Just little bits and pieces of knowledge you need to play the market.