How to subscribe for shares via Nordic Issuing
There are several ways to acquire shares. The most common method is by purchasing shares directly on the stock exchange, but shares can also be obtained through subscription in a new share issue. If you hold shares in a company that is carrying out a new share issue on the record date, you will automatically receive subscription rights credited to your account. These subscription rights entitle you to subscribe for new shares in the company.
Subscribing for Shares in an IPO
An Initial Public Offering (IPO) occurs when a company lists its shares for trading on a stock exchange. During an IPO, anyone may submit an application to be allocated shares, although not all applicants are guaranteed to receive the full number of shares they apply for. The share price is predetermined, and no commission is charged on the transaction. The price is often favourable, but of course, a profit can never be guaranteed.
If you are not allocated the shares you applied for, you will need to wait until regular trading begins and purchase shares directly on the market.
In practical terms, your application must be submitted to the issuing agent or advisor handling the transaction. This is done via a subscription form. For transactions where Nordic Issuing acts as issuing agent, the subscription form is completed digitally, and you will receive a copy of your signed form by email to the address provided on the form. After the subscription period has ended, those who are allocated shares will receive a contract note specifying payment details. Once the new shares have been paid for and registered with the Swedish Companies Registration Office (Bolagsverket), they will be delivered to the custody account specified on the subscription form.
Subscribing with Subscription Rights
One of the most common types of share issues is a rights issue using subscription rights. In such cases, the company seeks to raise new capital by issuing new shares. Existing shareholders are granted preferential rights and receive subscription rights which they can use to subscribe for shares at a predetermined price. It is usually also possible to purchase subscription rights on the market, which provide the same preferential rights as those granted through existing shareholdings.
Subscription rights are securities that entitle the holder to subscribe for shares at a fixed price. The subscription price for the new shares is usually lower than the prevailing market price. Existing shareholders receive subscription rights in proportion to their current holdings. For example, five existing shares may entitle the holder to subscribe for one new share, which is expressed as a 1:5 ratio.