Dividend Cash

In this article, we explain how to apply a dividend amount per share to BFS accounts

The example below explains making a dividend in a share with currency SEK and tax country Sweden.

In BFS a dividend can be done from two different menus, from the menu Instrument Management > Corporate Actions OR from the action menu at the Instrument. Either way, the result will be the same.

OR

A pop-up ticket will appear on the screen. First, choose an instrument.

Next choose the type of corporate action, in this example: DividendCash

This will open a creation dialogue where you can define the following properties.

Property	Description

Property	Description
Name	Is pre-filled, but can be changed. For example: typeofcorporateaction_ISIN_date / DividendCash_SE1234565555_20170117
Trade Date (Ex-dividend date)	This is the date that should be used as the TradeDate on the created transactions.
Dividend record date (Record Date)	When a company decides to declare a dividend, its board of directors establishes a record date. This is the date when a person must be on the company’s record as a shareholder to receive the dividend payment. This is used to determine which position holders should receive the dividend with regards to the settlement dimension.
Dividend pay out date	This date should be used as the SettleDate and ValueDate on the created transactions
Total Amount	The total amount of the dividend payment
Amount Per Share	The dividend amount per share (the currency of the instrument) will be applied to account holders that had a position in the instrument in the settlement dimension on the day of the DividendRecordDate.
Custody Account (Cash)	The deposit of the total dividend amount will be booked into the selected custody account.
Exception Account	If the amount does not match the difference has to be booked into an exception account.
Currency Rate	Will be visible if the currency exchange is needed.

Click Create to create the dividend.

The dividend now has the status Prepared which means that the back office administrators get a preview of all transactions that will be made. As long as the dividend has the status Prepare the back office administrators can change the parameters.

House summary shows each house account and the amount that will be entered there. If there is a big amount in the exception account there could be trades that are not settled yet.

Resulting Client Transactions shows all transactions that will be made for each customer, dividend, and in some cases tax. If the customer has an ISK account there will be no tax transaction.

When the batch is in the "Prepared" state it is still possible to change the parameters of the batch a run the "Prepare" function of the batch again. In the example below, we will change the total amount, to 1000. Click Save to save the changes.

Press Prepare again to see the changes.

It´s important to make all changes before choosing to execute, for it is not possible to change the dividend when it is executed.

When we are satisfied click on the button Execute or select Execute in the action menu.

Click Confirm to Execute the batch.

The dividend is now executed and transactions are now created for the house account and the client accounts.

In the customer view, the customer has received a dividend and has a tax transaction.

Problems that can appear when making the dividend

Missing settings

If a person lacks the proper settings, for example, tax country, the back office administrators will receive an error message. To change this click on the customer name.

To change go to the tab Details > Legal information and add a Tax Count in the Customer Overview. Then go back to the dividend and Prepare the dividend batch again.

If a tax account is missing in the House Summary, there could be missing settings in Tax management. Read more in this article: Country Tax Rates

Correct

If you need to correct the corporate action please read this article: Correct batch transactions