Bonds trading conditions

Corporate actions events may result in entitlements in the product which cannot be supported. In case of such entitlements, an information only event will be advised to move the resultant entitlements to another broker upon receipt. Saxo do not hold any liability on any losses or compliance arising. Saxo advise clients to read the documents for the terms and conditions of the offer.

Currency options are not extended to clients. When a currency option is announced within the framework of an event, the payment will be processed as per the denominated currency of the security listing.

The day before a Corporate Action event is scheduled to take effect (the Ex-date), open orders are deleted for certain event types.

The following details the rules of behaviour:

For dividends and rights issues, all open orders for the given instrument will be deleted if the change in market price is calculated to be over 20%, due to the Corporate Action event.

Such events are offered where there would be a requirement by law of the country of incorporation of the issuer for tax purposes or if the issuer offers holders a fee for participation.

Government Bonds for United States of America, United Kingdom, France, Canada and Germany: payment for these markets are made contractually on the announced pay date as per the issuer.

Any discrepancy (debit or credit of funds) in the payment, will be passed to client after the pay date if issue terms changes between the announcement date and the pay date.

Proceeds include coupon and principal payment as per pool factor reduction.

For other markets, redemption payment for government bonds are made once these have been received by Saxo.

Corporate actions events are announced in different markets whereby documents and beneficial owner details may be required. In such cases, Saxo will specify the information in the event notification, to advise the client of the additional requirements to fulfil by the stated deadline. Clients are advised to refer to the event notification details. All documents are shared with clients on a separate email where applicable. Clients are advised to check with their advisor, for legal and compliance matters.

In the event of missing or incomplete documents, client instructions may be rejected. No liability will be accepted in the event of missing or incomplete documents.

In such cases, clients are advised to respond to the original email which will be provided by Saxo, with the additional requirements stipulated. Any deviation from the original email may result in delay or non-acceptance of the documents / instructions.

For exchange offers, customers holding a position in their portfolio will have the possibility to elect prior to the deadline. Please note that any holdings that have elected to exchange, will be debited on the instruction deadline date and will be booked on a dummy security (represented by a LOCK  symbol). This is to prevent elected holdings from being sold before the payment date. The exchange entitlement will be booked upon receipt from the agent.

In the case where scale back of exchange occurs, holdings not accepted will be unblocked and proceeds for the accepted exchange instructions will be booked upon receipt from the agent.

In corporate actions, issuers may announce to offer resultant entitlements in different markets. In such cases, resultant entitlements first should be transferred and registered in the respective markets and after that will be available for trading. Such movements may take additional time. During the transfer period client entitlements will be blocked for trading.

Holdings in the liquidated company will be removed. Liquidation proceeds, if any, will be allocated.

Mandatory corporate action events are processed on ex-date and which result in tradeable entitlement. However, in some cases pay date of the event is not confirmed or beyond the tradeable cycle. In such cases, Saxo will process the entitlement to a dummy security to block the trading. Resultant entitlements will be booked to clients accounts as soon as received from agent.

For mandatory Mergers there are different outcomes: 

1. Cash (distributed on Pay-Date) 
2. Stocks (distributed on Ex-Date) 
3. Mix of Cash & Stocks (distributed on Ex-date)

For mergers with elections, clients have the possibility to elect prior to the deadline.

Sometimes a Corporate Action involves an instrument that is Non-Online Tradable with Saxo. 

Under those circumstances, the procedures are as follows: 

Positions in new instruments that are 'Non-Online Tradable', assigned resulting from a Corporate Action, are booked to the client’s account. The instrument will be added to the client’s account for reporting purposes only.

Government Bonds for United States of America, United Kingdom, France, Canada and Germany: Maturity payment for these markets are made contractually on the announced pay date as per the issuer.

Any discrepancy (debit or credit of funds) in the payment will be passed to client after the pay date if issue terms change between announcement date and pay date.

For other markets, redemption payment for government bonds are made once these have been received by Saxo.

Corporate Bonds:  Redemption payment for government bonds are made once these have been received by Saxo.

Resultant entitlements which are paid as interest will be allocated on actual basis upon receipt from agent for the eligible holding as per record date. Such distributions will not be made in cash.

Clients holding the stock as of Ex-date will be given the possibility to subscribe for new shares. The offer to purchase new shares is not transferable.

Special and infrequent Corporate Actions may occur within the corporate actions handling process. Saxo will handle such Corporate Actions in the best interest of clients to the extent that time and operational process permits.

Taxes and fees may also occur on corporate actions other than cash dividends, such as fee on a stock dividend or tax on a merger. When such taxes and fees occur Saxo will pass to the clients’ account, as soon as received from agent.