All public listed companies (Plcs) which announce a book-closing date for cash dividends on or after Sept 1, will be required to credit such payments directly to shareholders’ bank accounts under the eDividend initiative by Bursa Malaysia Bhd.
eDividend is a service which allows Plcs to credit cash dividend entitlements directly into investors’ accounts instead of making payment via bank cheques.
Bursa Malaysia chief executive officer Datuk Yusli Mohamed Yusoff said eDividend was not mandatory for shareholders but he hoped they would subscribe for the newly-introduced service as it was more convenient.
“One of the main objectives of implementing eDividend is to promote greater efficiency of the payment system which is aligned to the national agenda of migrating towards electronic payment platforms,” he said at a briefing yesterday.
Chief market operations officer Devanesan Evanson said shareholders could provide their bank account details to stockbrokers for the purpose of payment through eDividend, by submitting the eDividend form from April 19.
He added that there would be a one-year grace period for shareholders to provide the required details. However, existing Central Depository System (CDS) account holders who had yet to update their banking details would be charged a one-off administrative fee after April 18, 2011 when they update their bank account information.
While the eDividend was not mandatory for now, it would be made mandatory for new CDS applicants to provide their banking details for eDividend purpose as required in the new forms, he said.
Devanesan said the exchange was still working out the administrative fee.
“This (eDividend) is a seamless transaction. There will be no more delays in receiving the dividend. In fact, the dividend will be credited one day after the payment is made,” he said.
The cost would be lower for Plcs to credit dividends directly compared with issuing cheques, he said, but did not disclose how much lower the cost would be.
Devanesan said there were currently eight Plcs using eDividend including British American Tobacco (M) Bhd, Bursa Malaysia, Guinness Anchor Bhd, Nestle (M) Bhd, Malayan Banking Bhd and PLUS Expressways Bhd.
He said the Rules of Bursa Depository and the Bursa Securities Listing Requirements had also been amended to facilitate the implementation of eDividend.
Yusli said there were currently more than four million CDS accounts maintained with Bursa Malaysia Depository Sdn Bhd.
“I hope to see all these account holders using this service,” he added.
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