Brokerage Office Procedure - When Issued Securities
When a corporate issuer declares a stock split, the stock will trade in the market place on a when-issued basis, prior to the distribution of the new shares. Sellers of the stock during this time may sell the stock on a when-issued basis or may deliver the old securities with a due bill attached for the new shares. Corporate securities sold on a when-issued basis will normally settle three business days after the securities are issued. Municipal securities that are sold prior to the certificate being available for delivery are sold on a when-issued basis. The purchaser will receive a when-issued confirmation and a final confirmation three days prior to the certificate’s delivery.