Introduction to the Corporate Actions tool

Introduction to the Corporate Actions tool

The Corporate Actions tool provides you with timely notice of upcoming voluntary corporate actions Tooltip for securities held in client accounts. A corporate action is any event, initiated by a public company, which affects securities, such as mergers, acquisitions, spin-offs, and stock splits. You can use the Corporate Actions tool to submit instructions for voluntary corporate actions on behalf of clients who have delegated authority to your firm.

Key features of the Corporate Actions tool:

  • View the offer terms and details of voluntary corporate actions for securities held in your client accounts.
     
  • Submit instructions for corporate actions on client accounts if your firm is authorized by your client to do so.
     
  • Change or cancel previously entered instructions Tooltip , if permitted.
     
  • Review instructions on corporate actions that have been received. You may review the instructions for all of your client accounts, regardless of whether the instructions were submitted by your firm or by the client.
     
  • View instructions up to 30 days after the expiration date of the corporate action.
     
  • Receive paper ballots, grouped into a master ballot, that include all shares for accounts that have delegated proxy voting to your firm.
     
  • Receive and vote on ballots online through Broadridge's ProxyEdge® service, offered through Charles Schwab & Co., Inc.
     
  • Designate who will receive announcements.
     
  • Produce printer-friendly pages to accommodate distribution and recordkeeping.

For information regarding corporate actions and the Corporate Actions tool, refer to the following:

Accessing the Corporate Actions tool

The Corporate Actions tool and the Electronic Coupon Instructions Tooltip page are accessible through two different options within the Schwab Advisor Center®.

  • Navigation bar—The Corporate Actions tool can be accessed by selecting More and then Corporate Actions from the menu bar on Schwab Advisor Center. This tool displays a list of all voluntary corporate actions currently affecting any of the accounts within your master accounts  Read data access Tooltip to view online. Select a corporate action to view the terms of the corporate action offer.
  • Alerts— Corporate Action alerts Tooltip are sent to your firm whenever a voluntary corporate action affects a position held in one of your master accounts. A separate alert is sent for each master account that has at least one linked client account holding that security. From the alert, you may access the Offer Terms page to view the terms of a corporate action offer. Note: Corporate action alerts are not sent for mutual funds.

Corporate action types

  • Consent Solicitation Offer
  • Conversion Offer
  • Dutch Offer
  • Early Redemption
  • Exchange Offer
  • Merger Election Offer
  • Rights Exercise Offer
  • Tender Offer
  • UIT Termination (if only one option allowed)
  • Warrants Exchange Offer
  • Warrant Redemption Offer

What’s the difference between the offer expiration date and the Schwab cutoff date?
The Schwab cutoff date is generally two business days before the offer expiration date, and the standard cutoff time is 7 p.m. ET. This facilitates Schwab's ability to process clients’ instructions on corporate actions. You may submit instructions electronically, when available, up to the Schwab cutoff date.

What if the client delivers instructions after the Schwab cutoff date but before the offer expiration date?
We do not take late instruction after Schwab cutoff.

Can corporate action elections be submitted online?
Yes. Elections can be submitted within the Corporate Actions tool, which can be accessed from the More tab or from the View Offer Terms link in alerts.

If my clients change their minds about a corporate action, can they withdraw their instructions to me and issue new ones?
In some cases, no. If the corporate action offer allows withdrawals, then instructions can be changed or cancelled at any time prior to being submitted to Schwab.

However, in some cases, the corporate action offer does NOT allow withdrawals, so instructions cannot be changed or cancelled after being submitted to Schwab.

What if my client has questions about fund availability for a Rights or Warrants Exercise?
For further assistance, call Schwab Alliance at 800-515-2157.

What if a corporate action offer affects a stock for which the client has an open sell order?
For open sell orders in a client account, the eligible holdings will be reduced by the quantity of the open sell orders. The system will not allow you to submit instructions for the quantity of the open sell order. You must cancel the open sell order prior to submitting instructions.

When open sell orders or unallocated sell orders affect multiple client accounts in a master, a warning message will appear on the Electronic Coupon Instructions page. It is your responsibility to cancel any open sell orders and/or allocate any executed block sell orders prior to submitting instructions. If the security is sold and is also submitted for reorganization, a short sell could be created in your client’s account.

What happens if the client chooses not to participate in the tender offer related to a merger?
The client will continue to hold the shares in their account. If the tender offer is successful, the outstanding shares will be exchanged for whatever is specified in the terms of the merger.

How can I review instructions after the offer expiration date?
Before the offer expiration date, you may print and retain the instructions submitted for your client accounts. Also, you will be able to view the instructions online for up to 30 days after the offer’s expiration date.

What are some types of issuer communications?

  • Proxy ballots and supporting documents
  • Corporate actions materials and election for voluntary reorganizations
  • Interim mailings (prospectuses, annual and quarterly reports, and any other information that does not require a follow-up)

Do clients have to receive proxy ballots electronically?
No. Clients who retain authority or request an informational copy can opt to receive proxy ballots and interim mailings in paper form or electronically. Paper mailings will be householded based on certain criteria.

Is there a fee for receiving proxy ballots electronically?
Yes. There is a $4 fee per Schwab account with a minimum annual fee of $1,250 with ProxyEdge®. For information on how to enroll, see How to set up accounts in ProxyEdge®.

Does Schwab send communications to clients about odd lot tender or purchase offers?
No. For an odd lot offer Tooltip , clients may wait two to three weeks to receive sale proceeds, and they do not receive a trade confirmation.

Can I look up corporate action delegation authority using the Profiles page?
At the master level view:

  1. Select a Master account from the account selector.
  2. Click on the Accounts tab, then click the Profiles sub tab.
  3. Click on the Columns button (top right of the table).
  4. Select Corporate Actions and Proxy voting (Proxy voting is currently only eligible for European Union securities).
  5. Click Apply.
  6. Review the columns (Client or Advisor) will displayed.

At the individual account holder view: 

  1. Select a Master account from the account selector.
  2. Click on the Accounts tab, then click the Profiles sub tab.
  3. Scroll down to the Issuers communications section of the page.
  4. Review the Original column, (Client or Advisor) will display.

How to customize Schwab reporting
How to set up accounts in ProxyEdge®
How to work with alerts
Introduction to alerts
Introduction to paperless documents
Introduction to ProxyEdge®
Introduction to the Balances, Positions, and Transactions tabs
Introduction to the Forms & Applications page
Introduction to the Profiles tab
Introduction to the Status Hub
Introduction to issuer communications
How to make general account changes

To select a form, go to the forms library on Schwab Advisor Center. 

See the tools and resources below to assist you with the Corporate Actions tool:

Corporate Actions Important Information