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Direxion Daily 20+ Yr Trsy Bear 3X ETF Message Board

  • VictoriaPark7 VictoriaPark7 Nov 11, 2011 11:26 AM Flag

    Cash or fractional share for share consolidation

    Can anyone comment on whether Direxion will issue cash or a fractional share to square up the 1-for-5 share consolidation?

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    • I just found the answer.

      Redemption of Fractional Shares and Tax Consequences for each Reverse Split
      As a result of the reverse splits, a shareholder of each ETF could potentially hold a fractional share. However,
      fractional shares cannot trade on NYSE Arca. Thus, each ETF will redeem for cash a shareholder’s fractional
      shares at the Fund’s split-adjusted NAV as of November 9
      , 2011. Such redemptions could cause a shareholder to
      realize a gain or loss. Otherwise, the reverse split will not result in a taxable transaction for holders of ETF shares.
      No transaction fee will be imposed on shareholders for such redemption.

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