Corporate Actions and Margin Positions

A corporate action is an event initiated by a company or issuer that affects a stock, ETF or ETC.

Examples include cash dividends, stock dividends, returns of capital, stock splits, reverse stock splits, mergers, spin-offs. There are also delistings, company liquidations, worthless removals and ISIN changes (all of these events are referred to as “other events”), that do not qualify as a corporate action but are explained anyways.

Corporate actions and other events can affect the price, number of units, tradability or structure of an asset. Because a margin position uses borrowed EURCV and the asset is used as collateral, a corporate action can also affect your margin position, your margin level and the actions available to you.

Corporate actions can change the value or composition of the stock that is pledged and secures Bitpanda’s repayment claim and thus affects your margin position.

These events can change the value of the collateral supporting securing the margin trade. In some cases, this may bring your stock value closer to the liquidation threshold.

The ex-date is the date from which the asset starts trading without the entitlement to the corporate action.

Whether you are entitled to the corporate action depends on whether you hold the asset as of the close of market trading, one business day before the ex-date.

Yes, if Bitpanda identifies that a corporate action may affect your margin position, you will be notified to the best of our ability.

Corporate actions are sometimes announced with short notice, especially for smaller companies or assets listed outside major European markets. This means Bitpanda may not always be able to provide long advance notice.

As per Stocks/ETFs/ETCs margin trading terms, Bitpanda has the right to terminate the margin position for important reasons, e.g. in case of mistrades or certain types of Corporate Actions. This may result in debt that needs to be repaid.

Read the notification carefully and check the deadline.

Depending on the event, you may be able to:

If you do not act, Bitpanda may close the position in line with the margin trading terms.

Yes, where repayment is available and completed in time.

If you fully repay the borrowed EURCV and accrued daily fees, the margin position is closed. The stock, ETF or ETC used as collateral is then released from the margin position and becomes a normal spot holding in your portfolio.

This means you are no longer holding that asset as a margin position. Any future corporate action handling will then follow the standard process for spot holdings.

Yes. Bitpanda may restrict certain actions in an affected asset before a client would becomes eligible for a corporate action.

For example, Bitpanda may block you from opening a new margin position or adding to an existing margin position in the affected stock, ETF or ETC before the ex-date or another relevant deadline.

A corporate action closure is different from a liquidation caused by your margin level reaching the liquidation threshold.

If your position is closed because of a corporate action, this does not incur any liquidation fees.

You can check your transaction history and trade confirmations.