What is an off-market transaction?

Last Updated: 08 Jul 2016

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. Find out more information on off market transfers.

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.

Off market transactions don’t show automatically in your Online Sharetrading portfolio.

Interested in online share trading? Find out more at ASB Securities.

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