Prax Exploration Deferred Consideration Unit shares – The ISIN for the Class I DCUs is GB00BQS92045 – The ISIN for the Class II DCUs is GB00BQS92151
In general, most corporate actions that will see provide options enabling ISA clients to receive the proceed distributions of the action into their stocks & shares ISAs, but it obviously depends on the specific corporate action. In most cases, the key question is simply whether the investments received by the ISA client because of the corporate action are ISA qualifying. So, there are no specific ISA regulations relating to corporate actions.
The Deferred Consideration Units (DCUs) are stated as being ‘complex instruments’ and according to the FAQ (link below) no application is being made for the Deferred Consideration Units to be listed or dealt in on any stock exchange. The DCU expire on 31 December 2026. The key point, therefore, is that the DCUs will not be ISA qualifying.
That being the case, the requirement will be to remove the DCUs from client’s ISAs within the ‘usual’ 30-day period (either by sale or transfer).
If there is no option of either sale or transfer of the DCUs (for whatever reason), we’ve had general guidance form HMRC in the past where, should there be no possibility of either selling or transferring the non-qualifying investments, they would allow the shares to remain in the ISA, but this usually relates to shares of negligible value (often referred to as deferred shares – not units) that are sometimes received by shareholders during various types of corporate actions (capital reorganisations, returns of capital, takeovers, bonus issues, etc). As mentioned, I don’t think that will apply in this instance.
So, although it appears that shareholders (ISA clients) may lose out if these DCUs are removed from their ISAs (as a significant portion of payments to shareholders will come via this route), all we can do is confirm the ISA rules in that if the investments (DCUs) are not ISA qualifying, they have to be removed from the client’s ISAs.
See links below on DCU’s: