The Board of Directors of TASE, in its meeting on May 22, 2024, approved an amendment to the TASE Rules, pursuant to which companies distributing a dividend will be required to report the final dividend per share amount to the public, instead of reporting the overall distribution amount. Accordingly, companies may update the final dividend per share amount until 2 trading days prior to the record date. Consequently, in the event of exercises taking place prior to the record date, the dividend per share amount will remain constant, while the overall dividend amount would increase.
This resolution is part of TASE’s strategy of aligning its activity with international standards. A review conducted by the TASE Staff shows that this is the common practice at leading international exchanges, including in the United States and the United Kingdom. This move is designed to encourage the activity of foreign investors on TASE, thereby enhancing the liquidity in the equity market, while also providing local and international investors with certainty regarding the dividend per share amount and allowing for a more accurate calculation of the ex-price.
The TASE Staff found that close to 75% of TASE-listed companies already report the dividend per share amount prior to the record date, despite their profit-based dividend distribution policy.
TASE-listed companies closely monitor the cap table, which enables them to hedge the overall distribution amount, accounting for expected exercises of their convertible securities, from the declaration date of the dividend through to the record date for its distribution. In addition, companies may elect to block exercises for several days prior to the record date.
Subject to the approval of the authorities, the resolution will take effect on February 1, 2025.
