Euroclear Belgium is launching a new service for the electronic payment of dividends for securities held in dematerialised, physical and nominative forms. Barring any regulatory objection, the new service, expected to commence in November, will increase operational efficiency, simplify the dividend payment process and reduce the cost to issuers of making dividend payments.
Euroclear Belgium aims to streamline and harmonise the dividend payment process by offering to receive funds directly from issuers and distribute dividends directly to custodians that hold securities on behalf of their clients. Today, issuers deposit funds for dividend payments to paying agents, which make payments bilaterally to custodians upon presentation of the relevant dividend coupon. Euroclear Belgium will also centralise all tax-related documentation pertaining to dividend payments, such as tax declarations, refund filings.
Several Belgian companies have expressed interest in Euroclear Belgium’s new service. After the successful execution of Business Solutions Builders International’s (BSB) dividend payment, ABATAN and Auriga International have decided to use the service in pilot mode.
Stéphane Bernard, chief operating officer of the Euroclear central securities depositories in Belgium, France and the Netherlands, said: “As a neutral partner to the Belgian capital market, Euroclear Belgium is looking to add value to issuers specifically, by reducing dividend payment processing costs, shortening the duration of time from the issuer’s release of funds to the distribution of dividend payments to investors and easing payment reconciliation. Centralising dividend payments and tax-related data will bring greater efficiency and transparency to the entire process.”
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