Adding shares and securities 108-19092749

Customers who own shares, own a small portion of the company they hold shares in.

Shares are a unit of ownership in a company and they give the holder the right to attend and vote at annual general meetings. In addition, they give the shareholder the right to receive a portion of the profit made by the company.

The asset value of shares is their net market value, not their face value. The market value is determined by the latest available End of Day sale price of the shares multiplied by the number of shares held. This applies for shares listed on the Australian Securities Exchange (ASX). The agency holds the share prices on the Securities and Investment Reference System, also known as the SIN or shares database. The Performance Details (SIPD) screen has historical share prices.

The value of shares in unlisted public companies is worked out based on how long ago shares in the company sold. If the date was:

• within the last 12 months, the sale price is used
• more than 12 months ago, the net value of the assets in the company is used

The Complex Assessment Officer (CAO) will assess shares held in a private company. The CAO determines the asset value of the company. In addition, any shares in public companies that are owned by a private company or private trust (entity) are keyed by a CAO on the entity's record.

The Corporations Act requires credit unions and building societies to issue a member share to customers when opening a new account.

Member shares are either purchased for a nominal amount ($1 up to $10) or the customer agrees to pay a nominal amount (up to $10) if the credit union/building society closes. Only one member share can be purchased or issued to an individual. These shares are completely different from any other type of 'share' due to the following characteristics:

• it is non-appreciative or accumulating
• there is no possibility of income being generated by the share (that is, dividends)
• it is not transferable
• it is only redeemable on cancellation (closing) of the credit union account(s)
• the details of the member share are not always available on a customer account statement(s)

The share value usually varies between institutions.

Deeming provisions for income purposes will apply.

Different rules apply to assessing income from trusts. These must be referred to a CAO. For more information about investment funds held in trust, see Trusts.

A security is a financial asset. They have a monetary value and can be traded. Securities are separated into 2 distinct categories:

• debt securities which are a way for companies, governments or institutions to borrow money
• equity securities (including shares) which are an investment in the stock of a company (aka listed securities), or which tracks an index or basket of securities. These can include:
• Ordinary shares
• Preference shares
• Warrants
• Options
• Exchange Traded Funds (ETFs)

As shares and listed securities are classed as financial assets, the deeming provisions are applied to calculate income. Therefore, customers do not need to tell us about the cash amount of dividends they get other than to update their bank account balance if needed. If the customer has a dividend reinvestment plan, they will get more shares rather than dividends. They must advise of the new number of shares or securities.

Customers can add and update personal information, including shares and securities online.

For a small change to asset values, determine if the customer needs to notify.