eDividend initiative was intoduced during 2010 Budget speech last year. Under the eDividend initiative, dividend payments from listed companies will be credited directly into shareholders bank account, instead of through cheques.
Paperless dividend payment system is convenient and faster for shareholders and helps avert potential problem of misplaced, lost or expired cheques.
In Bursa Malaysia, 500 listed companies are currently paying dividends to shareholders but only eight, including British American Tobacco, Nestle, Malayan Banking and Bursa Malaysia are offering eDividend.
All listed companies in Bursa Malaysia are required to provide eDividend option to shareholders by 1st September 2010.
Currently, there are more than four million Central Depository System (CDS) accounts and shareholders are encourage to use this service.
To use this services, shareholders are required to provide their bank account details to their stockbrokers starting 19th April 2010 by submitting an eDividend form. They can get the form from their stockbrokers or download it from the stock exchange website.
Individual shareholders must submit the form with a copy of their identification card and a certified copy of their bank statement, or bank account book, together with the original documents for verification.
Shareholders are given a one-year grace period to convert to the eDividend service for free. Those who provide the bank details after 18th April 2011, will be charged a one-off administration fee.
More information can be found at Bursa Malaysia webpage.