ASX is proposing to amend the timetable for dividends and distributions in Appendix 6A of the ASX Listing Rules to introduce a requirement that the last election date for a dividend or distribution reinvestment plan (DRP) must be no earlier than the business day following the record date for the dividend or distribution. If the proposals are implemented (the current proposed implementation date is 4 April 2014), listed entities will need to update the rules of their DRP and the rules of any other plan offered on a dividend or distribution and security registrars will need to implement process changes to accommodate the new timetable.
ASX has released a consultation paper, Timetable for Dividends and Distributions: A proposal to prescribe the last election date for a dividend reinvestment plan following the record date in which it proposes to amend the timetable for dividends in Appendix 3A of the ASX Listing Rules to introduce a requirement that the least election date for a dividend or distribution reinvestment plan (DRP) must be no earlier than the business day following the record date for the dividend or distribution.
ASX consider that the amendments are necessary in the context of:
- the reduction in the ex period from 5 business days to 3 business days across most corporate actions with an ex period (including dividends); and
- the current practice of a large number of listed entities of setting the last election date for a DRP on the same day as the record date.
ASX’s proposals aim to strike the best balance between the following key issues raised by different stakeholders, whilst minimising the impact on listed entities, security registrars and any underwriting arrangements currently in place:
- giving investors time to be fully informed of their entitlement position when giving election instructions; and
- providing custodians with sufficient time to seek election instructions and execute those instructions in an accurate and orderly fashion.
Submissions on the consultation paper were due by 29 November 2013 and subject to seeking regulatory approval, ASX has set a proposed date for implementation of the amendments (and the implementation of the reduced timetables for right issues which ASX consulted on in June 2013) of 4 April 2014.