The London Stock Exchange Group Plc on Wednesday said it is okay for firms to forego any dividend payment – due to the extraordinary circumstances caused by Covid-19 – but this must be announced immediately. The stock exchange will allow companies defer payment of dividends up to 30 days but not exceeding 60 days following the record date, meaning the date by which investors need to be registered shareholders in order to receive the dividend.
A company typically has to pay its dividend within 30 days of the record date, according to London South East. “An issuer must inform the Stock Situations Team of any deferral of a dividend payment and this must be notified without delay. After the deferral period has expired the dividend must be paid or cancelled. If any dividend is to be cancelled and not paid, this should be notified by the issuer without delay,” Nilam Statham, LSEG’s head of Primary Market & AIM Regulation, said.
LSEG said the new procedures were put in place following a series of enquiries from companies concerned about saving cash during the Covid-19 pandemic. “This guidance will remain in place until further notice. Any queries on this notice or requests for extension to the payment date should be addressed to the Stock Situations Team,” Statham added.
The stock exchange operator said it will continue to closely monitor the ongoing coronavirus situation, and is actively considering “all available options to ensure markets continue to function well and to support market participants”.
https://punchng.com/london-stock-exchange-to-allow-payout-deferrals/
