Corporate Actions Guide: Stock Splits & Reverse Stock Splits

Overview of Corporate Actions

Corporate actions are key events that companies trigger to make changes that can affect their securities. These actions might be aimed at rewarding shareholders, adjusting the company’s capital structure, or responding to operational shifts. Examples include stock splits, dividend payouts, mergers, and more.

Understanding corporate actions is important because they can impact both the number and value of your investments. In this guide, we’ll walk you through two common types—Stock Splits and Reverse Stock Splits—and show you how to handle them easily on the platform.

Corporate actions are generally classified into two types:

Mandatory: These corporate actions occur automatically, and no action is required from shareholders. The company implements the changes on its own.
Voluntary: These corporate actions offer options to shareholders, requiring them to choose from different courses of action.

Corporate Action Types: Stock Split & Reverse Stock Split

Corporate Action Type	Definition	How It Affects Price	How It Affects Quantity
📈 Stock Split	The company divides its existing shares into multiple new shares.	Price per share decreases based on the split ratio (e.g., in a 2-for-1 split, the price is halved).	The number of shares you own increases based on the split ratio (e.g., in a 2-for-1 split, you get 2 shares for every 1 you own).
🔻Reverse Stock Split	The company consolidates its shares into fewer shares.	Price per share increases based on the reverse split ratio (e.g., in a 1-for-2 reverse split, the price doubles).	The number of shares you own decreases based on the reverse split ratio (e.g., in a 1-for-2 reverse split, you get 1 share for every 2 you hold).

Essential Fields for Corporate Action Management

	Field	Description
1	Instrument	The unique identifier for the security (e.g., ticker symbol or ISIN).
2	Ratio From	The original ratio of shares before the corporate action. For instance, in a stock split, this might be the number of shares a shareholder initially holds.
3	Fraction Handling Method	The method used to deal with fractional shares resulting from the corporate action. Options: ROUND_UP: Rounding up fractional shares to the next whole number. CASH_COMPENSATION: Compensation for fractional shares in cash. RETAIN_FRACTIONAL_SHARES: Retaining the fractional shares. ROUND_DOWN: Rounding down fractional shares to the previous whole number.
4	Price Adjustment	Adjusts the historical price of the original instrument from the Action Date using the adjustment coefficient.
5	Action Date	The date the corporate action takes effect.
6	Announcement Date	The date the corporate action is announced to the public or shareholders.
7	Ratio To	The new ratio after the corporate action has been completed.
8	Compensation Price	The price at which fractional shares will be compensated, if applicable.
9	Price Adjustment Factor	A coefficient used to adjust historical prices of the instrument from the Action Date to reflect the impact of the corporate action.
10	Adjustment Days	Defines the number of days before the Action Date that historical prices should be adjusted.

How to Create a Corporate Action Record for Stock Split

Step 3: Input Stock Split Details

A form opens where you can input the necessary details:

Fields:

Action Type
Action Date
Announcement Date
Instrument
Ratio From
Ratio To
Fraction Handling Method, choose from:
- ROUND_UP
- CASH_COMPENSATION
- RETAIN_FRACTIONAL_SHARES
- ROUND_DOWN
Price Adjustment: (Enable/Disable)
Price Adjustment Factor
Adjustment Days
Description

Step 4: Review and Confirm

Review the split ratio, effective date, and instrument selected.
Click Create to finalize the record or Close to discard the changes.

Check the portfolio or instrument summary to confirm the new number of shares and the updated stock price. This should reflect the correct post-split data.

How to Create a Corporate Action Record for Reverse Stock Split

Step 3: Input Reverse Stock Split Details