How to apply Rights Issue using Cashier Order

Previously, I've written a post on how to apply Rights issue using ATM. Recently, I had a chance to apply the Rights Issue using Cashier Order as my bank was not in the list of participating banks. This post is to document the process for future notes.

In your rights offer document, there will be a page stating how to apply through banker's draft/cashier's order. It will also come with another paper which is of a different color and an envelope for you to mail it back.

You will just need to take note of the following before getting your cashier order:

1. How many rights units are you entitled to
2. How many excess rights units are you going to apply for

Near the top of the form, there should be a number that will at least state the number of shares that you own currently. There will also be 2 boxes in the form. One is to fill in the total number of rights shares accepted, and the other is to fill in the total number of excess rights shares you wish to get. For example, if you are entitled to 1000 rights shares, and you wish to get 3000, then you have to fill in 1000 (rights issue accepted) and 3000 (excess rights applied) respectively into the 2 boxes.

For the particular rights issue I participated, I had to manually calculate the number of shares that I am entitled to, and multiply it with the rights offer price. Likewise for the number of excess rights that I wish to get. Total them up and that's the amount you need to put in the cashier order. Put in the numbers to the form as it will be easier for you to reference to it later. Based on my experience, it seems that you should only draw one cashier order for the whole rights issue. Translated, you need to fill in the same cashier order reference number for the rights issue accepted and the excess rights.

There are a few ways to get cashier orders. There are some banks that allow collection of free cashier orders in certain branches if you "order" it online, and of course the more common one is to walk inside the bank and pay a small admin fee to process the cashier order.

If you're going to the bank for your cashier order, bring the form and the envelope along as it will contain instructions on how to draw your cashier order (e.g. “NOT NEGOTIABLE, A/C PAYEE
ONLY, addressee, etc).

If you're going to the bank, you will need to fill in a form for the cashier order. The teller will assist you to fill in the form so just fill in whatever that you can. My experience is that the envelope itself also contains instructions on how to write the cashier order so I passed the envelope to the teller too.

The teller will then process the cashier order for you. The last thing for you to do is to write the cashier order reference numbers in the 2 boxes provided and sign it. That's all to it.