What is a fractional share?

A fractional share is a portion of an equity stock that is less than one full share. Fractional shares allow you to purchase stocks based on the dollar amount you want to invest, so you may end up with a fraction of a share, a whole share, or more than one share. 

 

Fractional vs Full shares offered by TBanque

 

Benefits with TBanque

• Less capital is needed to invest in shares since clients can buy a portion of the share.
• Clients are able to invest in different shares (e.g., diversification of risk) assuming the same amount of capital.
• Brokerage and transaction fees for stock buying transactions are removed.
• TBanque is not making use of voting rights as the shares are acquired under the status Tenants in common.
• Easy access to financial markets via opening an account with TBanque
• Access to TBanque Social Feedfor market updates and exchange of views with other investors

 

Downsides with TBanque

• Clients waive any rights to vote 
• Shares cannot be transferred outside the TBanque platform
• Not all publicly traded stocks are available yet on the TBanque platform

 

Why TBanque offers fractional shares

• TBanque is a multi-asset platform committed to offering multiple investment options and education to its clients in order to invest wisely.
• Fractional shares make investing in non-complex instruments affordable to our client base and allow our clients to diversify their portfolios by also trading in non-complex instruments.
• Fractional shares allow you to start investing with much less initial capital in "real shares" without the risks related to other types of complex financial instruments.

 

What happens if a company becomes insolvent and a client holds a fraction of a share?

• The client will still hold their fractional interest. However, if the insolvency practitioner (or administrator/liquidator) cannot transfer fractional entitlements to another broker (or custodian) they may need to liquidate (sell) the fractional interest and return the monetary value to you.

 

Prices on stocks that investors see on the TBanque platform

• Share prices feed are based on a live NASDAQ for US shares and CBOE for European stocks

 

Corporate actions are treated the same when it comes to a whole share or a fraction of a share, in proportion to your fractional share position.

• Dividends: Once the Payment of the Cash Dividend is confirmed, TBanque uploads compensation per share (fractional shares receive the relative amount to your holdings).
• Splits: We apply the same split ratio in all of your holdings on the same effective day as the exchange.
• Reverse splits: Also, as regular splits. The same ratio is applied to all holdings on the effective date.
• Rights issue: On rights issues, we do not distribute the rights, but we distribute the cash equivalent of the Corporate Action. The amount to be compensated is calculated by the eligible closing price applying the adjustment factor provided. Payment is processed to you after we liquidate all of the rights we received from the custodian on the trading dates of the rights.