On 27 March 2016, the Securities and Stock Market State
Commission (SSMSC) decision from 12 March 2016 of No. 391 "On
Procedure of payment of dividends by a joint stock company"
came into force.
The document provides joint stock companies with a choice to
carry out payment of dividends either through the
depository system of Ukraine or directly to shareholders.
The specific method of payment of the dividends is determined by a
relevant decision of the general shareholders meeting about the
entire issue of securities of the joint stock company (§3,
Payment of dividends directly to the shareholders
Payment of dividends directly to the shareholders on common
shares is carried out within six months from the date of a decision
of a general meeting of a joint stock company to pay dividends. A
general meeting may also hold a decision to carry out the payment
of dividends in the shorter term (§1, Section II).
Payment of dividends directly to the shareholders is held:
By transferring funds to
shareholders' accounts (bank accounts which are specified in
the list of persons entitled to receive dividends)
By postal orders to the
shareholders' addresses, specified in the list of persons
entitled to receive dividends (in case the list of persons entitled
to receive dividends does not contain bank account information)
(§3, Section II)
If the transferred funds return, the joint stock company has to
provide an appropriate payment to the shareholders through the
depository system of Ukraine (§4, Section II).
Payment of dividends through the depository system of
Payment of dividends through the depository system of Ukraine is
carried out based on the agreement on service of the securities
issue with a central depository – National depositary of
Ukraine (§1, Section III).
National Depository of Ukraine, after receiving information
about the company`s intention to pay dividends and/or about the
order to compile a list of persons entitled to receive them,
publishes the relevant information on its website within the next
business day (§6, Section I).
Payment of dividends through the depository system of Ukraine is
carried out in three stages:
Transfer of funds (that have to be
paid to persons entitled to receive dividends) from the joint stock
company to the banking account of the National Depository of
National Depository of Ukraine
provides an order to other depository institutions to carry out the
payment of dividends
Depositary institutions pay the
dividends to the shareholders (§2, Section III)
At the same time, the joint stock company can carry out the
payment of dividends either by paying the entire amount of the
dividends in full volume or by several parts, if it is required by
the decision of the general meeting or the supervisory board of the
company. In case of the company adopting the decision to pay
dividends by parts, such payments are carried out simultaneously to
all persons entitled to receive dividends (par.1, §2, Section
SSMSC decision No. 391 also governs the process of
shareholders' notification about the payment of dividends:
A company shall notify the persons
entitled to collect dividends of the date, amount, procedure and
term of their payment
If the dividends are paid directly to
the shareholders, the notification shall also contain additional
information about the method for shareholder to obtain dividends,
as well as information about the procedure of payment through the
depository system of Ukraine (in case the transferred funds return
and the joint stock company has to provide an appropriate payment
to the shareholders through the depository system)
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