Interactive Brokers & Retail Share Purchase Plans

Hideaway · 7 July 2009

Hi,

I'm considering using an interactive brokers account to purchase some more shares. There are a few companies that I think are about to announce retail shareholder purchase plans that allow existing retail shareholders to purchase up to $15k worth of shares each, at a discount.

Since an Interactive Brokers account is not CHESS sponsored and my name will therefore not appear on the shareholder register at the record date. If my shares were purchased through IB, will I be able to purchase in any retail SPP's?

Thanks very much for your help!

Hideaway.

skc · 7 July 2009

Yes we can, says Obama.

You just need to initiate a ticket through IB's messenger system and they will participate on your behalf.

Hideaway · 7 July 2009

Thanks - even if it's a retail offering though? Because I imagine their shares are held with Fortis as institutional shares.

Appreciate all your help!

skyQuake · 7 July 2009

Short answer is Yes, it works.

I've applied for the CDU offer and hedged it on market. I've opened a ticket to participate and have been advised that it will be acted upon.

However money is still in my acct and I've yet to receive a response.
Will keep you updated.

skc · 7 July 2009

Same situation here. They acknowledged but not yet actioned. The SPP wasn't supposed to be finalised until end of this month.

Hideaway · 7 July 2009

Thanks guys.

Has anyone successfully managed to purchase shares through a retail SPP via interactive brokers yet?

If yes can you please speak up?

Thanks again!

skyQuake · 9 July 2009

Update:

Got my CDU shares today. Sold them and closed out cfds

A bit late than Aus residents but all is fine.

Hideaway · 9 July 2009

Thanks mate - that's exactly what I wanted to hear.

Going to sign up for an account now. All the best!

Barndat · 9 July 2009

Did anybody take up the recent AIO rights issue thru IB. They appeared in my portfolio on the 26th Jun with a Market Value of 131.04 and a negative Unrealized P&L. I sent a ticket to IB and they said I can purchase the shares or sell the rights if they are traded or just let them expire. They were very brief with their reply and so to date, being unsure as to how I do any of the above, I have not done anything....

Has anyone followed up on the offer...??

Thanks for any reply's..
Peter

skyQuake · 9 July 2009

Sell those rights or you'll lose money!

They're like some very short dated in the money options

skc · 9 July 2009

Barndat said:
Did anybody take up the recent AIO rights issue thru IB. They appeared in my portfolio on the 26th Jun with a Market Value of 131.04 and a negative Unrealized P&L. I sent a ticket to IB and they said I can purchase the shares or sell the rights if they are traded or just let them expire. They were very brief with their reply and so to date, being unsure as to how I do any of the above, I have not done anything....

Has anyone followed up on the offer...??

Thanks for any reply's..
Peter

I have AIO but they do not appear in my portfolio page but they appear in my statement. My original AIO holding however appear to have a different average price from when I purchased them.

I don't understand why the same deal appear different between you and I

AIO rights are not tradable from what I understand. The market value of 131.04 is also clearly wrong. On my statement the AIOR has no value, just the right quantity.

I have sent them a ticket to subscribe to the right. They acknowledged but I am still waiting. I also waiting on response for additional subscription.

Will update here when I hear back.

Consider subscribing (by sending IB a ticket soon) and then shorting straight away with a market maker. From what I understand the 1-for-1 rights is guaranteed. This will lock in the differential price while you pay a bit of brokerage each way.

happymark · 18 July 2009

I have had plenty of disappontment with IB on share offers. They scale back on most of them saying that IB just gets a package that must be shared by their customers. That is I order $15,000 and get maybe $3,000 this hurts when it's something like Macqaurie Bank. Last effort was i requested NMS share offer of $15,000 on 15/7 (offer closes 17/7). They reply to my message that on 17/7 at 11am that i had missed the "deadline". Now if they get a "package" for IB that is shared among it's customers, then how can i miss the "deadline".

I give them a lot of brokerage and save on their great prices BUT I have lost a lot in missed profits from the many windfall share offers they have "handled".

skc · 23 July 2009

skc said:
I have AIO but they do not appear in my portfolio page but they appear in my statement. My original AIO holding however appear to have a different average price from when I purchased them.

I don't understand why the same deal appear different between you and I

AIO rights are not tradable from what I understand. The market value of 131.04 is also clearly wrong. On my statement the AIOR has no value, just the right quantity.

I have sent them a ticket to subscribe to the right. They acknowledged but I am still waiting. I also waiting on response for additional subscription.

Will update here when I hear back.

Consider subscribing (by sending IB a ticket soon) and then shorting straight away with a market maker. From what I understand the 1-for-1 rights is guaranteed. This will lock in the differential price while you pay a bit of brokerage each way.

Just to follow through... I have received my allocation of AIO shares today.

I got 1-for-1 rights plus full allocation of additional subscription. It was a nice little surprise given the scale back (2.1x original holding) announced by the company. I actually got over 5x my holding...so I promptly sold a good portion for a profit

I guess some of their clients didn't take up the offer so I got more than my share. One of the hidden benefits of the IB model.

happymark · 4 August 2009

Has anyone discovered why IB as a "custodial" "depository" and "agent" cannot claim the full list of "beneficiaries" (clients) who notify IB that they want to take the offer.

All I can get from the message centre is "IB just get one parcel that is shared".

The companies with Share Offers say they make available the offer to each of the "clients" when provided with the list of "take-up-clients" from the "custodian".

Hideaway · 5 August 2009

Am pretty disappointed so far on this one actually.

I purchased some shares in NAB about a month ago through my interactive brokers account. NAB announced a $15k SPP and I raised a ticket with IB so I can participate in it.

I received the following response today:
"Dear Trader,

IB cannot enroll you in this SPP as we are ineligible. There are restrictions placed on IB which is regarded as a US company.

Thank you, Patrick R
IB Customer Service"

This is not really acceptable in my mind, since I'm an Australian trader trying to buy additional shares in an Australian company using a US broker to transact. This doesn't seem to be an issue for any other broker in the country except for IB.

Anyone else have experiences of this?

happymark · 6 August 2009

That is what I have been experiencing. Perhaps "Steve" from Interactive Brokers can educate us. This a major limitation in this platform.
I restate that the literature from IB says it is our share "custodian".
Literature and discussion with Ozzie companies doing SPP such as NAB, MQG etc. etc. say the "custodian" should submit a list of the individual Ozzies as the "benificiaries" and each "benificiar" will receive full entitlement.

It appears if they do not submit the list then they just get one parcel if eligible that they share up between us. Seems they may be short staffed or lazy if it's manpower then maybe they could charge some small fee to do the "full" service needed.

happymark · 6 August 2009

Further to IB SPP limitations -
I have spoken with a compliance adviser within the ASX, and they have informed me that -

"Interactive Brokers are not a direct participant of the ASX Group. They trade through Timber Hill (and are the parent company of Timber Hill). Additionally, Share Purchase Plans (SPPs) are not covered under ASX Operational Rules, so unfortunately you will need to speak to your broker further about you being ineligible to participate in SPPs as this is a service related issue."

skc · 6 August 2009

happymark said:
That is what I have been experiencing. Perhaps "Steve" from Interactive Brokers can educate us. This a major limitation in this platform.
I restate that the literature from IB says it is our share "custodian".
Literature and discussion with Ozzie companies doing SPP such as NAB, MQG etc. etc. say the "custodian" should submit a list of the individual Ozzies as the "benificiaries" and each "benificiar" will receive full entitlement.

It appears if they do not submit the list then they just get one parcel if eligible that they share up between us. Seems they may be short staffed or lazy if it's manpower then maybe they could charge some small fee to do the "full" service needed.

This has not been my experience with several recent SPP / rights entitlement. AIO, VBA, NMS and AIO (SPP).

It is completely unacceptable if they don't let you participate in NAB's SPP. They will lose my business straight away if that is the case.

Hideaway · 6 August 2009

skc said:
This has not been my experience with several recent SPP / rights entitlement. AIO, VBA, NMS and AIO (SPP).

It is completely unacceptable if they don't let you participate in NAB's SPP. They will lose my business straight away if that is the case.

So you have been able to apply for the VBA entitlement then? I have raised a ticket a couple of days ago but not yet received a response on that one.

I have been given a direct NO on the NAB SPP and it infuriates me - I'm missing out on a roughly $3k profit... I spoke both with NAB investor services and ASIC and apparently there are no rules governing this. If IB say I'm not entitled then apparently I'm not entitled.

Hopefully my experience with other capital raisings proves to be better.

SilverRanger · 6 August 2009

How is NAB SPP different to any other SPP's?
It's totally unacceptable to me if we did not get our entitlement simply because IB did not bother to care about Aussie clients

Perhaps if more of us voice our concerns then they will start doing something?

Interactive Brokers & Retail Share Purchase Plans

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