Why would a stock delist?
The main reasons for delisting include violating regulations and failing to meet minimum financial standards such as the ability to maintain a minimum share price, financial ratio's, and sales levels. Delisting can also be a voluntarily decision by the company.
When a company does not meet listing requirements, the listing exchange issues a warning of noncompliance. If noncompliance continues, the exchange is required to delist the company's stock.
Usually, the company would issue a press release through the investor relations section of their website to notify shareholders. After a stock has delisted, our corporate actions and risk departments would review the status of the stock and make any account adjustments if required. Each account type has different processes as below:
Spread bet and CFD accounts
The standard procedure is to close your delisted stock position at a level of zero and open a new position on your behalf called a ‘proceeds line’. This new position would be untradeable and hold no value to your account. If the company confirms there is no return to shareholders, we would close your ‘proceeds line’ position at the level of zero. If proceeds are left over for shareholders, we would allocate these proceeds as applicable.
If you hold a long position, we can close the position upon your written consent via an email to helpdesk.uk@ig.com. This would waive your right to potential future proceeds.
If you hold a short position, we have to wait for the company to complete their delisting process before being able to remove the position.
Please note that it could take several years for a company to liquidate or complete the delisting process, which is out of our control.
If a stock has been delisted from the exchange but continues to trade OTC (over the counter), the stock’s status would change to ‘call to close’. This means the stock is now on phone dealing only and you would need to call our helpdesk if you wish to close the position. This is because IG does not offer stocks that only trade OTC.
Share dealing accounts
If you hold shares that have delisted on your IG share dealing account, we can't close the position – as we have no control in this instance. We would have to wait for the company to complete their delisting process which could take several years. Once completed, you may or may not be granted proceeds as a shareholder. If no funds are left over after a liquidation, proceeds are usually not granted.
If a stock has been delisted from the exchange but continues to trade OTC (over the counter), the stock’s status would change to ‘call to close’. This means the stock is now on phone dealing only and you would need to call our helpdesk if you wish to close the position. This is because IG does not offer stocks that only trade OTC. The standard phone dealing charges would apply.
ISA share dealing accounts
ISA regulations state that delisted stocks are not allowed to be held in an ISA, therefore have to be transferred to your share dealing account. Following this, any ISA allowance pertaining to the position would not be refunded and any potential proceeds gained from the delisting would be taxable.
If the stock relists, the position can be moved back into the ISA via a bed & ISA stock transfer.
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