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Corporate actions

What is a corporate action?

A corporate action is an event, agreed upon by a company’s board of directors and authorised by its shareholders, that causes material change to the company’s securities.

What is the difference between a mandatory and a voluntary corporate action?

Mandatory events: you will be informed regarding this type of corporate action, however this will only be for information purposes as you will not have a choice whether to participate in the corporate event or not. Once this type of event has gone into effect in the market, it is applicable to all outstanding shares or bonds, the investors will not have a say in it. These types of corporate actions will be applied and booked automatically and do not require a response from you. Examples of mandatory events are spin-offs and stock splits. Corporate actions with choice options: these are mandatory events which require a choice by the investor. An example of this is the choice on how to receive dividends. The dividend will be paid regardless (even if you do not respond) however you have the choice between receiving the dividend in cash or in shares. If you do not send instructions, you will automatically receive the default option which will always be described in the corporate action notification. Voluntary events: for voluntary events you have the choice whether to participate or not. The investors together actually have a say in the outcome of the voluntary corporate action. An example of a voluntary event is a public takeover bid, every investor has the choice to offer their shares to the company that launched the bid or to not offer their shares. In this case if all investors refuse to offer their shares, the takeover will not take place.

What is the process for participating in a Corporate Action?

For every corporate action that will be processed on your account, you will receive a notification upfront. From this notification it will be clear whether you have a choice to make regarding the corporate action or not, a description of the different options and the deadline to send instructions regarding your choice. How to instruct:1) Instructions will need to be sent via secure message as a reply to the corporate action notification.2) If you wish to take no action and not participate in the corporate action, there is no need to notify us.3) If you wish to participate, you must clearly indicate the option you would like to elect and the amount of shares you would like to offer for participation in the corporate action. Should you be eligible to participate in a corporate action across multiple investment accounts, you will have to detail your elected options per investment account in the secured message. Unfortunately, MeDirect cannot process instructions that are not detailed enough.

What do I need to do if I hold a securities investment which is undergoing a corporate action?

If there is a corporate action announced in the market that impacts your position, you will receive a corporate action notification from us in your inbox on our digital platform. The notification will contain all the known information regarding the corporate action and will specify whether it concerns a mandatory event or a voluntary event. If it concerns a mandatory event, the notification is only sent for information purposes and there is no action required from your side. Our corporate actions team will process the corporate action on your behalf. If it concerns a voluntary event it means you have a choice to make. If you do not wish to make a choice, or if you are happy with the default option, there is no need to take any action. If you wish to make a specific choice you will have to send us your instructions before the mentioned deadline.

Are there certain corporate actions not offered by MeDirect?

Dividend option/reinvestment – all markets except local Maltese market where possible. T&Cs reason: Nominee account restrictions Odd lot offer – United States equity market T&Cs reason: Participation is adverse for the client (additional cost versus platform execution) Non official offer – United States equity market T&Cs reason: Not regulated by United States Securities Exchange Commission (SEC) Loyalty bonus offer – French equity market T&Cs reason: Nominee account restrictions

Can MeDirect advise me on which option I should take?

Our MeSolo accounts are “execution-only” accounts. This means that we offer access to the different markets through our platform but clients have to make their own investment decisions. Under the MiFID II regulation we are not allowed to give advice for “execution-only” accounts, which also applies to corporate actions. To determine the best option for you, it is recommended to consult the official publications provided by the company and/or to consult with an external (tax) advisor.

What happens if I miss the deadline to respond to a Corporate Action?

Unfortunately MeDirect cannot process instructions that have been received after the deadline has passed. If MeDirect does not receive specific instructions, the default option will be applied. Every corporate action notification will contain a clear indication of what the default option is.

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We strive to ensure a streamlined account opening process, via a structured and clear set of requirements and personalised assistance during the initial communication stages. If you are interested in opening a corporate account with MeDirect, please complete an Account Opening Information Questionnaire and send it to corporate@medirect.com.mt.

For a comprehensive list of documentation required to open a corporate account please contact us by email at corporate@medirect.com.mt or by phone on (+356) 2557 4444.