Hi everyone,
we are currently working in the background on an improved implementation of spin-offs. Spin-offs are one type of corporate action. The goal is to no longer treat them like dividends in the future, but to handle them with their own, more suitable logic.
To make this solution as practical as possible, we need examples of real spin-offs from different brokers. Examples from brokers in other countries are also very welcome.
As a first example, we looked at the spin-off of TKMS from ThyssenKrupp.
One part of the legal background is this ruling by the German Federal Fiscal Court:
Following this, the German Federal Ministry of Finance published the following letter:
In simple terms, this means that the original acquisition costs have to be allocated between the existing shares and the newly booked shares in a spin-off. However, how exactly brokers handle this in practice is not always consistent.
In the ThyssenKrupp / TKMS example, Flatex Germany handled it as follows:
- For every 20 ThyssenKrupp shares, 1 TKMS share was booked.
- Fractional shares were not booked by Flatex.
- Instead, there was a cash settlement for the fractional part that was not booked.
- This cash settlement was treated like a sale, where the market value was booked as profit.
- The acquisition costs were only allocated to the securities actually booked into the portfolio. No proportional acquisition costs were allocated to the cash settlement.
This leads to our main question:
How do other brokers handle this?
The following points are especially interesting:
- Are the acquisition costs allocated between the original shares, the new shares and a possible cash settlement?
- Is there a cash settlement at all?
- Are fractional shares booked?
- Is the transaction shown as a spin-off, dividend, delivery, corporate action or sale?
- Are there differences between German and foreign brokers?
In order to build a clean and broadly applicable solution, we need different real-world cases so that we can convert them into tests.
What is needed:
- All purchase transactions of the original share before the spin-off
- The documents or bookings related to the spin-off, usually a delivery or corporate action
- Bookings related to the cash settlement, if applicable
- Acquisition value of the original shares after the spin-off
- Acquisition value of the new shares after the spin-off
Important: The goal is not to judge or rate individual brokers. We only want to understand how spin-offs are handled and displayed differently in practice.
If you have suitable debug files and/or documents from previous spin-offs, feel free to upload them here in anonymized form or send them by email if needed. The more different brokers we can cover, the more practical and reliable the new solution can become.
As you can probably see, the implementation is not trivial. Therefore, we currently cannot reliably say when the implementation will be completed.
So far, we have examples from:
- Flatex Germany