Single Share CFDs Corporate Actions

A corporate action is something which will bring about a change to a security, such as but not limited to a rights entitlement issue, spinoffs, mergers and stock splits.

If there is a corporate action on a security and that security is the underlying instrument of a FXCM CFD contract, FXCM shall determine in accordance with market practice and internal policies the appropriate adjustment, if any, to be made to the current contract value or contract quantity of any open positions in order to preserve the economic equivalent of your position or to reflect the effect of the underlying event on your CFD position.

This may result in the liquidation of positions, the closure and reopening of positions at adjusted rates, dividend adjustments, the transfer of positions to a new symbol or other actions outlined below.

If the economic equivalent of the corporate action is one that FXCM is unable to replicate on a CFD contract, then we may close the relevant CFD contract prior the effective date of the corporate action.

Depending on the type of corporate action, all open positions may potentially be liquidated and/or pending entry orders, stops and limits associated with the instrument may be cancelled. In this case clients would need to re-establish another position if desired and/or insert new stops and limits.

FXCM aims to open and close markets as close to the posted trading hours as possible, however in the event of certain corporate actions, FXCM may place trade restrictions, delay market open or bring forward market close.

• All positions will be closed at the end of day rate.
• Any floating profit or loss will be realized.
• Positions are then automatically reopened at an adjusted open rate and position size, to retain the same notional value as the closed position.
  • For example if a client has 10 contracts opened and the end of day rate is 300.00 and the underlying share has a 10:1 split
  • The old position will be closed at 300.00
  • A new position will be opened for 100 contracts at an opening rate of 30.00
• Pending orders including stop/limits are deleted and required to be re-entered manually by clients.
• If the split ratio is not a whole number, then only the closest whole number of contracts will be reopened. Where rounding is required, we will always round down.
• Margins will be updated accordingly using the same split ratio.

More about Stock Splits

What happens to the charts?

• At the time of the split, the historical charts will not be updated. This allows clients the ability to self-audit any historical trades.
• However within a few weeks following the split, we will divide all historical charting by the ratio of the split, in order to allow indicators to perform relevant analysis on the historical price movements.

What happens to positions on Indices and Stock Baskets?

• Baskets and Indices with components that have a stock split, do not have their rate impacted directly by the split.
• There is an internal rebalance to the equation that govern the pricing of these products, and the weighting of the relevant stock within the index is multiplied by x to account for the 1/X drop in price and therefore there is no impact on the overall basket price.

What Companies offered by FXCM have splits upcoming?

• Please note the below information is indicative and subject to changes/additions with no notice.
• There are no upcoming stock splits known at this time.
• NVIDIA (NVDA.us) had a 4:1 stock split effective Tuesday 20th July, 2021.

All clients who held open positions at the end of trading on Monday 19th July 2021, were impacted by the split.

• All positions will be closed at the end of day rate.
• Any floating profit or loss will be realized.
• Positions are then automatically reopened at an adjusted open rate and position size, to retain the same notional value as the closed position.
  • For example if a client has 100 contracts opened and the end of day rate is 300.00 and the underlying share has a 10:1 Reverse Stock Split
  • The old position will be closed at 300.00
  • A new position will be opened for 10 contracts at an opening rate of 3000.00
• Pending orders including stop/limits are deleted and required to be re-entered manually by clients.
• If the reverse split ratio is not a whole number, then only the closest whole number of contracts will be reopened. Where rounding is required, we will always round down.
• Margins will be updated accordingly using the same split ratio.

Note in addition to a standard delisting the below treatment is also relevant for when an acquisition or merger results in the delisting of a stock.

• The instrument will be set to “close only” shortly prior to the date of the corporate action.
• Clients can manage their existing open positions, but cannot add new exposure.
• All positions will be liquidated prior to market close on the date FXCM designate.

• FXCM treat Stock Dividends, similarly to Cash Dividends.
• No positions are added to your account, however your account will be debited or credited the value of the stock owed to offset the expected change in instrument price as a result of the stock dividend.
• The exact dividend amount will be determined based on the value of the stock after market close.

• In order to support a ticker change, a new symbol is created and open positions and pending orders are transferred.
  • The change does not occur at the exact same time as the underlying ticker is changed, but over a weekend shortly following the corporate action.
• At the time of the corporate action FXCM will update the display name in the platform but the instrument ticker will not change.
• Trading will remain open, unaffected.
• Once the new symbol is created and tested, FXCM will transfer open positions and pending orders to the new symbol and then halt trading on the old symbol.
• Old positions will be closed at their open rate and new positions will be opened at the same rate.

• Spinoff Treatment may vary depending on the underlying event
• In the event that a spinoff results in a stocks entitlement then FXCM will attempt to treat such corporate actions same as Stock Dividend Treatment.
• If for any reason FXCM is unable to replicate the economic equivalent of the spinoff on your CFD position, then the instrument may be set to "close only" shortly prior to the date of the corporate action.
• Clients can manage their existing open positions, but cannot add new exposure.
• All positions and pending orders will be liquidated/removed prior to market close on the date FXCM designate.
• FXCM aim to reopen the market for trading when market condition allows.

Stock Baskets may need to be rebalanced when any components of the basket have certain corporate actions such as but not limited to delisting’s, stock splits and spinoffs.

Additionally due to internal liquidity or pricing considerations or if a component has dropped 90% from the inception rate, FXCM may choose to remove the component and rebalance the Basket.

• The Basket will be set to “close only” shortly prior to the date of the rebalance
• Clients can manage their existing open positions, but cannot add new exposure.
• All positions and pending orders will be liquidated/removed prior to market close on the date FXCM designate.
• FXCM aim to reopen the market for trading after the rebalance and/or when market condition allows.
• In some cases FXCM may choose to switch a component 1-1 for another product, in this case pricing will not be halted and positions will not be liquidated. However all open position holders will be notified, and given the opportunity to close their position prior to the component change.