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Dividend payout preferences

The payout preferences option will apply to normal dividends paid into your account (non- elective) and Corporate Actions (elective events) that only have cash or shares options.

Non-Elective events

Payments made into your account as a result of a non-elective Dividend/Income distribution can either be paid into the cash portion of your account or automatically reinvested into the instrument that paid out. This Dividend/Income distribution would ordinarily just be paid into your account, so we are taking away the hassle of you having to invest this cash yourself if you want the payout reinvested back into your holding. This is still a normal transaction, which means you will incur the standard fees.  We will simply reinvest the net amount, which is the Gross dividend amount Less any necessary deductions declared by the issuer (e.g. Dividends withholding tax, issuer portfolio costs (ETF’s), other expenses) and transaction fees incurred.

Example:

Gross dividend = R100

Less Dividend withholdings tax = R20 (R100*20%)

Net Reinvestment amount = R80

In this example we would reinvest R79.69 (R80 investment costs) from the net dividend amount of  R80 paid into your account if you had elected to reinvest the proceeds.

Elective events

An elective event requires an investor to make an election on a specific type of Corporate Action for cash or shares. Elective events that normally involve a dividend payout are Dividend Reinvestment Plans (DRIPs) or Optional Dividends. In both cases, you can either elect a cash payout or more shares in your holding. These events take place in the market, therefore you do not incur any transaction fees through the platform. The only fees you incur would be stipulated by the issuer, which in turn will be communicated to you through the Corporate Action notification you receive.

Please click on the Links below for examples of elective events:

Dividend Reinvestment Plan Example

Optional Dividend Example

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