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What is a Fractional Share Right (FSR)?

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EasyEquities allows you to invest in a portion of a share, while still getting the benefits of being a shareholder. This is called Fractional Share Investing and we’re the only one’s who offer it in South Africa. Even though a share’s price might be, say R1000, you’re able to invest in and own R100 of that share. Because of Fractional Share Rights, even if you don’t have the amount needed to invest in one whole share, it doesn't mean that you can’t invest in it at all. 

The concept of fractional investing applies to all of your EasyEquities accounts and currencies.  

Here's a quick explainer video on FSRs:


Example

Joe is an investor who wants to buy shares in Naspers. 

Joe checks the Naspers share price, but realizes he only has R500 to invest with. Though this amount is not enough to invest in a whole Naspers share, Joe is able to invest in R500 worth of a Naspers share. Over time, if Joe is able to continue investing small amounts into Naspers, he will eventually end up owning a whole Naspers share. The price of a share therefore does not depict whether you are able to invest in it or not. 

Do I receive dividends for the fractional share rights? 

Yes. Dividends are paid out on whole shares as well as the Fractional Share Rights of that share. 

The dividend paid out on fractional share rights will be the dividend per share issued by the company in proportion to your fractional holding.

How are Fractional Share Rights held on the EasyEquities platform?  

When an EasyEquities client invests in a fraction of a share (Fractional Share Right), First World Trader (Pty) Ltd (trading as EasyEquities) acts as a principal to a contract for difference (CFD) issued to the investor. 

This CFD is what gives the investor a contractual claim against First World Trader to the economic benefits and risks associated with their portion of the share owned (price movements and dividends) without having ownership rights in the underlying share. 

If over time, an investor enters into enough CFD Transactions with the same underlying share so that he/she acquires rights to 100% of a share, then the CFD Transactions will be closed out, and a whole share will be delivered to you 

Unlike whole shares, Fractional Share Rights (FSRs) do not carry any voting rights. 

Read more about how your cash and investments are protected here.

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© EasyEquities. EasyEquities is a product of First World Trader (Pty) Ltd t/a EasyEquities which is an authorized Financial Services Provider (FSP number 22588). All trades on the EasyEquities platform are subject to the legal terms and conditions to which you agree to be bound. The EasyEquities platform enables users to invest in securities which includes whole shares and fractional share rights (FSRs). EasyEquities acts as an agent for the issue of whole shares, where the investor is the registered owner of those shares, entitled to dividends, participation in corporate actions and all the economic benefits and risks associated with share ownership.

In respect of FSRs, EasyEquities acts as principal to a contract for difference issued to the investor, where the investor will have a contractual claim against EasyEquities to the economic benefits and risks associated with share ownership (price movements and dividends) without having ownership rights in the underlying share. Fractional share rights (FSRs) which are issued through a contract for difference, are an over the counter derivative. Unlike whole shares, FSRs do not carry any voting rights. As the investor makes further investments in FSRs and ultimately ends up with a whole share, the contract for difference is closed out and ownership whole share is delivered to the investor.

The availability of any share on the EasyEquities platform is based on various factors but is not an indication of value and does not mean that any share is an appropriate investment for you.

The availability of any share on the browse shares page does not necessarily indicate any contractual relationship between EasyEquities and the listed company, or the payment of fees for services. Brand Logos are owned by the respective companies and not by EasyEquities. The use of a company’s brand logo does not represent an endorsement of EasyEquities by the company, nor an endorsement of the company by EasyEquities, nor does it necessarily imply any contractual relationship. Further investment disclosures are available on the EasyEquities website.

* Note exchange prices are delayed in accordance with regional exchange rules. South African prices are delayed by 15 minutes; North American prices are delayed by 15 minutes; Australian prices are delayed by 20 minutes.

EasyEquities is a subsidiary of Purple Group Limited, a company listed on the JSE Limited (PPE)