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Investing strategies

Understand corporate actions & when to respond

View the different types of corporate actions and see how they can impact you.
2 minute read

What's a corporate action?

A corporate action is an event—agreed upon by a company’s board of directors and authorized by its shareholders—that causes material change to the company's securities. Typically, corporate actions can be considered voluntary or mandatory.

Common voluntary corporate action events

Some offers require response online or over the phone to apply your election decision to your investments. Here are some examples of common voluntary corporate actions:

How to respond to a voluntary corporate action

To participate in or review the terms of the offer, log in to your Vanguard account, choose My Accounts, and select Balances & holdings. To read more about the offer, select “corp actions” below your account number. 

Response submission policy

What are warrants and how do I exercise them?

Warrants give the holder the right to purchase a certain number of shares at a set price during an extended period. Warrants can usually be transferred, traded, or exercised by the holder.

Note: Warrants can trade while they still have value in the market or until they expire. If you don’t take any action before their expiration date, they’ll automatically be redeemed for little to no value.

How to exercise them:

  • Warrant exercises will be available online through our Voluntary Corporate Actions portal one month prior to expiration. If you’d like to exercise them earlier, you can give us a call.
  • Not all warrants can be exercised. You can find details about their features in the company's prospectus. 

Abandonment of securities

You can elect to abandon one or multiple securities anytime by removing them from your account. By doing so, you permanently surrender and relinquish all rights and title in the abandoned securities. 

If you wish to abandon one or multiple securities, log in to your Vanguard account, choose Forms from the top header, select the Search using title or keyword tab, and key in “Abandonment Request Form.”

Common mandatory corporate action events

Some offers may also require you to respond either online or over the phone to apply your election decision to your investments. Here are some examples of some common mandatory corporate actions:

Special due bill processing

Tracks who’s due a pending payment when a stock is bought or sold after the record date of a distribution. Due bills are typically used for special dividend payments, stock splits, spin-offs, and sometimes during the issuing of rights and warrants.

When an event carries a due bill, the ex-dividend date of the distribution falls after the record date. The due bill ensures that shareholders are paid based on the ex-dividend date even if the stock was traded after the record date.

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