As part of an effort to enhance payment efficiency, all public listed companies (PLCs) on Bursa Malaysia that announce a books closing date for cash dividends on or after 1 September 2010 will be required to pay the cash dividends to their shareholders by directly crediting such payments into their bank account under the eDividend initiative. Shareholders who opt for this service will be able to receive their cash dividends directly into their bank accounts.
In his Budget 2010 speech last year, the Prime Minister of Malaysia, Dato’ Sri Mohd Najib Bin Tun Haji Abdul Razak called upon PLCs to offer eDividend to shareholders. On 26 October 2009, the Securities Commission released a statement announcing that eDividend would be offered by the third quarter of this year.
Tan Sri Zarinah Anwar, Chairman of the Securities Commission Malaysia (SC) said “This will provide shareholders greater convenience and faster access to their dividends while PLCs will also benefit with eDividend’s lower cost. This is an important initiative to ensure that the Malaysian capital market continues to be relevant and attractive to investors”.
According to the Chief Executive Officer of Bursa Malaysia, Dato’ Yusli Mohamed Yusoff, the Exchange is cognisant of the importance of achieving greater efficiency and offering convenience to the investing public.
“Given the convenience that eDividend can offer, Bursa Malaysia looks forward to receiving an encouraging response from shareholders to this initiative. There are currently more than 4 million Central Depository System (CDS) accounts maintained with Bursa Malaysia Depository Sdn Bhd, and I hope to see all these account holders come on board to use this service,” he said at the eDividend media briefing at Bursa Malaysia earlier today.
The paperless dividend payment system will result in increased convenience and faster access to dividends within a secure environment for shareholders. It eliminates the need for them to visit the bank to deposit dividend cheques which are posted to them, as well as the problem of misplaced, lost or expired cheques.
Shareholders can provide their bank account details to their stock brokers for the purposes of eDividend via the submission of an ‘eDividend Form’ from 19 April 2010 onwards. The forms can be obtained from their stockbrokers or downloaded from Bursa Malaysia’s eDividend webpage.
Individual shareholders are required to submit to their stock brokers the eDividend form together with a copy of identification card (MyKad or Passport) and a certified copy of their bank statement or bank account book together with the original documentations for verification.
Corporate depositors are required to submit original certified true copies of Certificate of Incorporation or Certificate of Registration and original certified true copies of the bank statement.
For both corporate and individual depositors, any bank statement extracted from the Internet has to be certified by a bank officer of the same bank.
Those with more than one CDS account can also choose to consolidate their dividends into a single bank account, or opt to assign different bank accounts for each CDS account. This option is available to shareholders at the point of updating their bank account details.
Shareholders will be given a one year period to provide their bank account details for eDividend beginning 19 April 2010. Those who do so after 18 April 2011 will be charged an administrative fee.
The rule changes to the Rules of Bursa Depository and the Listing Requirements to facilitate the eDividend initiative is targeted to be issued and made available for reference on www.bursamalaysia.com on 15 April 2010.
For more information and to access the Frequently Asked Questions (FAQs) on eDividend please also visit www.bursamalaysia.com