What is an off-market transaction, I'm not sure what that means?

Last Updated: 06 Oct 2014

Off–market securities transactions take place between an investor and another party, often a share registry or the company that issued the securities, outside of the formal market (ie the stock exchange). These transactions might include (but are not limited to):

Dividend reinvestment: This is where an investor does not receive dividends in cash, rather the dividend is automatically reinvested in the company and the investor receives additional shares.

New issue: A new issue is the expression used when securities (shares or bonds) are offered for sale to the public for the first time.

Off-market transfer: This is a change of ownership from one name to another, done privately through the share registry. 

Corporate action: This is an event initiated by the issuing company that can change the number of shares held by an investor. A dividend is one example of a corporate action. Another example is a share split, where a company splits existing shares into multiple shares at a specified ratio e.g. 2:1. Following a split, an investor will hold 2 shares for every 1 they held prior to the split. The dollar value of the shares held by an investor will remain the same, but they quantity they hold increases.

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