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When dividends, new stock or subscription warrant, etc., are given to the issues eligible for loans for margin transactions, JSF will receive the rights from a securities company which uses stock loan (hereinafter referred to as "sell side"), and transfer the rights to a securities company which uses loan transaction (hereinafter referred to as "buy side").
JSF will secure the rights on collateral stock certificates for loan, which has not been appropriated to stock loan on the last day with rights, by reporting as a beneficial shareholder based on the securities custody and book-entry transfer system. However, as the rights on the part of collateral stock certificates appropriated to stock loan cannot be secured, dividends and new stock or warrants of standardized margin transactions are dealt with, as follows:
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Rights on cash dividends |
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From sell side, JSF will receive the amount regarded as dividends, which is calculated by deducting withholding tax from dividends paid by issuing corporations, and pay it to buy side. |
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Rights on new stock or subscription warrant |
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Rights other than cash dividends, such as new stock or subscription warrant at stock split, etc., will be dealt with by converting the rights to cash.
In the event that new stock and other rights remain after receiving applications from buy side for subscribing new stock, JSF will sell remaining new stock allocated to JSF in a competitive bidding (bidding for rights).
The price of rights is calculated as follows.
The total value handled is divided by the number of shares handled
to calculate the average bidding price, which is then multiplied by the rate of
new stock allocation to obtain the price of rights.
JSF will handle rights by receiving, from sell side, the value to be calculated by multiplying the price of subscription warrants by the number of shares, and paying it to buy side. When no new stock and other rights remain due to applications for subscription, a similar handling process is applied by using the price calculated based on the closing price on the last day with rights as a price of subscription warrant.
In case of investors who keep open positions of such issue in margin transactions, corresponding value will be drawn from the contracted price at a securities company for both margin buying and selling customers. |
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A securities company will submit applications for loans or stock loans for the differences between margin selling and margin buying balances prior to the last day with rights. |
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A securities company which has outstanding loans and receives applications for subscribing new stocks from margin buying customers will notify the applications on the last day of rights. |
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Net over-loan shares (A) minus subscription shares (B) are the basis shares for rights bidding (c). |
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The basis shares for rights bidding (C) multiplied by the allotment ratio of rights are the rights bidding shares. |
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The price of rights should be calculated by multiplying the average bidding price, which is calculated by dividing the total value of bidding by bid shares, by the allocation rate of rights. |
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JSF will receive the value to be calculated by multiplying the shares of stock loans by the price of rights from sell side on the day of allocation and pay it to buy side. |
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