Question:

We own stocks and mutual fund shares that automatically reinvest dividends. Sometimes the purchase date or the settlement date (when the shares actually change ownership, generally 2 days after the purchase date) is on Yom Tov. Is this a problem; should we cancel the automatic reinvestment if there is a possibility that shares will be purchased or settled on Yom Tov? And if so, If a particular account does not give the option to forgo reinvestment must we sell the funds before Yom Tov to avoid this?
Also, does it make a difference if we do not know in advance which day the transaction will occur?

Answer:

It is permitted because it is automatic and you didn’t instruct the company to specifically make the transaction on Yom Tov. Also you are not really making a kinyan on the stocks, rather it is being placed into your account. This is even if you happen to know that the transaction will take place on this day.

Tags: business on shabbos Yom Tov

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