If there is any corporate action during securities lending? Who does the interest belong to? How to deal with it?

According to the "Securities Lending Agreement", the securities borrower shall return all the corresponding rights and interests of the borrowed shares to the lender if the corresponding shares generate company actions during the period of securities borrowing.


Cash dividend / Stock dividend

When a listed company announced these above corporate actions and you hold short positions of it, the system will send you a notice. You can choose to close the short position before the specified date in the notice to avoid paying the additional equity cost of the corporate action.

If you fail to close your positions before the specified date, the system will automatically freeze your funds and deduct the corresponding funds on the ex-Dividend date.

Notes:

In particular, if the corporate actions are cash dividend/stock dividend, the system will freeze the funds in your account at the estimated price and deduct them on the equity dividend day to buy back the corresponding shares.

For stock dividend, the frozen funds = positions * share ratio * settlement price of the previous trading day;

For cash dividend, the frozen funds = positions * dividends per share.

The frozen funds do not represent the actual amount of deduction, and please view the settlement report for the actual amount. After deduction, your account may be in danger due to insufficient frozen funds.


Split/Joint-stock and code update

For split/joint-stock and code update, there will be no additional cost for short-selling.


Other corporate actions

Rights / subscription rights, acquisition, delisting, voting, etc (all other than those listed above)

When the listed company to which you hold short shares issues an announcement and generates one of the above corporate actions, the system will send you a notification, and you can choose to close short positions before the specified date in the message.

If you do not close your position before the specified date, the system will close your positions at the market price on the date specified in the message.


Risk Statement

1) The corporate actions equity may become a significant cost of borrowing securities, which should be considered in advance.

2) Due to the risk of cancellation and change of the corporate actions at any time, Futu may fail to get the latest information in time, and after the cancellation and change of the corporate actions, Futu will still notify you.

3) The time between the announcement of corporate actions and the actual time of company action may be very short. Your positions may be forced to close within a very short time after receiving the message.

4) Corporate action is the inherent risk of margin trading. You need to understand this risk in advance before deciding to open a short position.