Return of Capital - MRE (Minara Resources)

[Fiat_23]

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. "

 

[So_Cynical]

I just checked my account and my $855 was deposited today and my trade is still in $500 profit. :

 

[bellenuit]

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?[/I]

That is how the system works and is not unfair or unjust. Settlement occurs on the transaction date + 3 working days. This is the close of business on Friday 27th in your case. It is then your name goes on the register as the owner of that parcel of shares, so your name was not on the register on the record date of the 25th.

However, at opening on Monday 23rd August, the share price, compared to the closing price on Friday 20th, should have dropped by about the same amount as the capital return per share (if the market were perfect and there were no other factors influencing the share price over that weekend, other than the entitlement to a capital return). That is because those that held the shares on Friday 20th were entitled to the capital return (as their names would still be on the register on T+3), but those who bought the shares on Monday 23rd would not be entitled (T+3 for them is the 26th).

When you bought the shares on the 24th, they were already discounted for not being entitled to the capital return.

Friday 20th is like the ex-dividend date for dividend payments, with Wednesday the 25th being the record date. Those who buy after the ex dividend date but before the record date are not entitled to the dividend and just like a capital return, the share price usually drops by the dividend amount when the shares go ex.