Instruction process
Disclaimer - This section is subject to future changes
Upvest is currently in the process of finalising the the evaluation of the overall setup. Therefore, this section of the documentation describes our current state of knowledge, which may change in the future.
In the instruction process for choosable and voluntary corporate actions, users have the right to select or participate in a corporate action. However, most and especially the less savvy retail users can easily get confused if they are not aware of the choices offered by their bank. This can potentially lead to a greater support burden for the client.
For this reason, Upvest focusses on simpler processes that
- help users to simplify their selection
- make it easier for clients to introduce this type of security and
- shorten the time to market.
Default options
The key lever is to reduce the overall choice offered to users by introducing (or strictly maintaining) default options as defined for each corporate action event.
This essentially means that if a user does not provide detailed instructions, Upvest will choose on behalf of the user according to the defined default option.
This overall process is specified in Upvest's Terms and Conditions.
Upvest handles different types of instructions for the minority of users (approximately 1-2%) who wish to participate in a different way and give different instructions to us.
The standard options defined by the custodian and Upvest are currently as described in the following sections.
Instruction regarding voluntary corporate actions
In connection with a voluntary corporate action, shareholders instruct Upvest with ‘No action’, i.e. users do not participate in voluntary corporate actions.
Instruction regarding choosable corporate actions
In connection with choosable corporate actions, the user will instruct Upvest as follows:
If there is a cash option in connection with a choosable corporate action, then the shareholder instructs: "Cash option".
If there are several cash options, all cash options that are not denominated in EUR are excluded.
If there is no cash option, but a sell option in connection with a tradable rights issue, the shareholder instructs: "Sell option".
If there is no cash option and no sell option in connection with a tradable rights issue, the shareholder instructs
the custodian bank to exercise the default option if the proceeds from the over-the-counter (OTC) sale of subscription rights are less than or equal to the OTC sales transaction costs.
If the proceeds from the OTC sale of subscription rights are greater than the transaction costs for the OTC sale, the subscription rights are sold and the proceeds are distributed.
If there is no cash option and no put option in connection with a choosable corporate action, then the shareholder instructs: "Custodian default option".