I have written about shareholders special benefits in the past, but I did not write about how to obtain them, so this article will explain the processes of obtaining shareholder’s special benefits. Please note that you need to be a Japanese resident to obtain these benefits.
Create an account at a security company
This is similar to opening an account at a bank. Without an account, you cannot buy stocks, so it is essential.
There are two types of security companies: online security companies and general security companies. Online securities have lower commissions than general securities. The reason why online securities are cheaper is that they used the Internet as their trading location, so they do not incur labor costs.
Each brokerage firm has two types of commissions: a per-order stock trading commission and a fixed daily stock trading commission.
A fixed daily fee is a system in which the fee is determined by the total amount of money traded in a day.
The following is a comparison of the commissions of major online security companies.
| Stock trading fee per order (Yen) | Stock trading fee per 1 day (Yen) | |||||
|---|---|---|---|---|---|---|
| Securities company |
0 to 100,000 |
100,000 to 500,000 |
500,000 to 1,000,000 |
100,000 | 500,000 | 1,000,000 |
| SBI securities |
99 yen | 275 yen | 535 yen | 0 yen | 0 yen | 0 yen |
| Rakuten securities |
99 yen | 275 yen | 535 yen | 0 yen | 0 yen | 0 yen |
| au kabucom securities |
99 yen | 275 yen | 535 yen | 0 yen | 0 yen | 0 yen |
| Monex securities |
110 yen | 495 yen | 1,100 yen | 550 yen | 550 yen | 550 yen |
| Matsui securities |
– | – | – | 0 yen | 0 yen | 1100 yen |
| SBI neo trade |
88 yen | 198 yen | 374 yen | 0 yen | 0 yen | 0 yen |
| Okasan Online |
108 yen | 385 yen | 660 yen | 0 yen | 0 yen | 0 yen |
| DMM.com securities |
88 yen | 198 yen | 374 yen | – | – | – |
| SBI neo mobile |
– | – | – | 220 yen | 220 yen | 440 yen |
| LINE securities |
176 yen | 275 yen | 535 yen | – | – | – |
| GMO CLICK securities |
90 yen | 260 yen | 460 yen | 0 yen | 0 yen | 0 yen |
Decide which stock to buy
Once you have opened a security account, the next step is to decide which shares to buy. Basically, the minimum number of shares to be purchased is 100. However, recently, more and more security companies are allowing you to purchase as little as one share.
Since you are buying for the shareholder special benefit, you need to pay attention to the following.
- What benefits you can get as a shareholder?
- Dividends
- Funds required buying stocks
- How long you need to buy stocks
Buying and Selling Stocks
Once you have decided which stock to buy, all you have to do is to buy it. For an example, if you want to buy 100 shares of a stock with a price of 1,000 yen, you need to prepare 100,000 yen. There are also two types of order methods: market orders and limit orders.
Market Order
This is an order method that leaves the purchase price to the market. Stocks that are not traded very often may have a ridiculous purchase price, but they are usually traded at a reasonable price.
In the case of market orders, there is no need to determine the validity period. The reason for this is that, if there is a seller, there is high probability that the transaction will be executed. In other words, if you place a market order, it will be executed immediately for most stocks. This is the easiest way to place an order.
Limit Order
A limit order is an order method that allows you to freely set the buying price. After placing an order, you can “revise” or “cancel” the order if it has not yet been executed. Therefore, limit orders often take a long time to be executed, since, they do not execute immediately like market orders, you must decide on the “order validity period,” which is how long you want to keep the order open.
If you do not set an expiration date and your order is not executed, it will expire on the same day. In this case, you will need to consider either placing another market order or placing a limit order with a higher buying price.
Record date
Shareholder benefits and dividends are subject to a vesting date. A vesting date is a day on which shareholders are entitled to receive benefits and dividends if they are listed in the shareholders’ register on that day, usually at the end of the fiscal year or month.
In order to be listed on the shareholders’ register as a shareholder, you must buy shares at least two business days before the recorded date, not on the day of the record date.
The business day following the last day to exercise rights is called the “ex-dividend date.
For example, if the vesting date is on the 31st (Tuesday), it would be as follows
- 27th Friday: Buy shares by this day
- 28th Sunday: Non-business day
- 29th Saturday: Non-business day
- 30th Monday: Ex-dividend day (day on which you may sell your shares)
- 31st Tuesday: Record date
Even if you have successfully bought stocks on the final day of the rights period, there is actually one more thing you should be aware of before then. That is the holding period of the stocks.
Some preferential stocks require a certain holding period, such as “at least six months from the record date” or “at least one year”.
For example, let’s say the holding period is set at one year and you have not held the stock until now. Another example, let’s say you have a one-year continuous holding period and you have not held the stock until now. Even if you realized that this is a good benefit and rush to buy the stock near the next final day of rights issue, you will not be able to receive the benefit because the continuous holding period is not enough.
You can receive shareholder benefits two to three months after your rights are vested.
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