Bursa Malaysia to extend e-Dividend facility to cover cash payments

Source: Bursa Malaysia

Bursa Malaysia today published a consultation paper seeking public feedback on proposals that are aimed at promoting greater efficiency for cash payments made by issuers to their securities holders.

As part of the strategic priority to propel the Exchange to be the leading marketplace in Asia, Bursa Malaysia is proposing to extend its eDividend framework to various common types of cash distributions and other cash payments made by listed issuers to their securities holders (eCash Payments).

Under the eDividend framework launched in 2010, listed issuers are required to pay cash dividends directly into their securities holders' bank accounts as provided to Bursa Malaysia Depository Sdn Bhd (Bursa Depository).

With eCash Payments, securities holders will be able to receive their payments within a shorter timeframe, in a secure environment and without the need for further action on their part. At the same time, listed issuers will achieve greater efficiency as direct crediting of payments into bank accounts will eliminate administrative work such as reconciliation of unclaimed cheques and processing of requests for the issuance of replacement cheques, among others.

The consultation paper seeks the public's views on the following main proposals:

to mandate listed issuers to pay various common types of cash distributions as specified by the Exchange electronically to their securities holders such as interest or coupon payments and income distributions made by collective investment schemes such as real estate investment trusts and exchange traded funds, where their consent has been obtained for eDividend; and
to facilitate issuers to pay other cash payments electronically, on a voluntary basis.

The consultation paper is available on Bursa Malaysia's website at www.bursamalaysia.com. The deadline for comments to the consultation paper is 18 April 2012.

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