Rights Issue

1. What is a rights issue?

Rights issue refers to the issuance of new shares by listed companies, allowing existing shareholders to subscribe for new shares in proportion to their shareholding. If shareholders do not participate in the rights issue, their rights will be "diluted."

According to the number of shares held, the corresponding number of basic stocks will be purchased at the rights issue price. Generally speaking, the rights issue price will be lower than the market price.

2. What is rights?

Rights refer to the rights of listed companies to implement rights issues and distribute them to existing shareholders. Every shareholder with rights can subscribe to its underlying stock at an agreed price. At the same time, only shareholders who have obtained the rights can participate in the application for the rights issue. The specific rights issue plan shall be subject to the announcement of the listed company.

The ex-net date of the rights issue: listed companies usually announce the ex-net date and the rights issue announcement at the same time. If the customer holds stocks on the trading day before the ex-date, they can obtain rights; if the customer buys stocks on or after the ex-date, there is no rights.

3. Rights issue name and code

Underlying stock name + the word "equity"

Code characteristics:

For those that can be traded on the secondary market, the rights code is usually 29XX or 83XX;

If it cannot be traded in the secondary market, the rights code is usually 44XXX.

4. Operational options of rights

1. Selling rights in the secondary market: If the rights acquired by the customer are of a type that can be traded in the secondary market, then the rights will be traded in the secondary market on the second trading day after the rights are obtained.

2. Apply for rights issue: subscribe for its underlying shares at an agreed price.

3. No processing will be done. After the expiration of the rights, the rights will be automatically invalidated.

5. The life cycle of equity

The 4 life nodes of rights : listing date, last trading day, rights issue deadline, and stock distribution date

Tradable equity generally only has about 5-7 trading days, and it can be traded between the listing date and the last trading day. The rights issue can be applied for between the listing date and the deadline for the rights issue. After the trading of rights ceases, the holders of rights represent that they will purchase the relevant number of underlying shares. When conducting a rights issue, the client's account must have sufficient funds to purchase the required number of shares. If the customer does not have enough funds to subscribe for the number of available shares before the expiration of the rights issue, the customer can choose to make a partial subscription or give up the rights held. The underlying stocks purchased at the time of the rights issue are entered into the position on the date of distribution of the underlying stocks.

6. Application Rules

1. The number of shares to be applied for shall not exceed the maximum number of equity shares

2. The number of shares to be applied for must be the whole lot

3. A rights issue can only be applied once, not multiple times

4. The purchase amount needs to be less than the current available transaction purchasing power balance

5. In the case of pending acceptance, support to cancel or modify the rights issue

How to apply for rights issue in Webull?

1. Go to the Home page（Webull Logo）>Assets>Details>

2. Scroll down the interface to the bottom> apply for rights issue

3. After entering the "Apply for Rights Issue" interface, you can view the currently available stock and quantity,and our tips

Risk disclosure: The trading days of rights are short, and the liquidity is not necessarily active. If you hold rights but do not choose rights after expiration, you will generally lose all the principal of purchased rights; During the stock distribution date, customers may have to face the risk of the underlying stock price falling but fail to sell as a stop loss; before deciding to participate in the rights transaction, the customer needs to understand the expiry date and related information of the relevant rights.