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When the stock you hold pays a dividend, you usually have to pay certain fees for collecting your entitlement.

What types of fees am I subject to?

To receive a cash or scrip dividend distributed by a listed company, generally, you have to pay both a scrip fee and a collection of cash / scrip dividend fee.

Scrip fee

CCASS normally charges its participants (e.g. banks or brokerages) a registration and transfer fee (commonly known as the scrip fee in the market) of $1.5 per board lot on the book-close date, calculated according to the net increase in aggregate balance of that stock in a participant's account over the last collection date.

Some intermediaries may pass the exact rate of CCASS scrip fee to their clients while others may levy a higher rate.

Collection of dividend fee

When CCASS distributes a listed company's dividend, it charges a fee of 0.12% of the amount of cash dividend collected. Intermediaries generally pass this fee back to clients; some may collect additional charges.

If you invest in stocks for dividend returns, then the scrip fee and collection of dividend fee will reduce the absolute amount of dividend you receive.

Example : Assuming you buy 100 board lots or 100,000 shares (1,000 shares per board lot) of Company D in January. Company D declares a dividend of 1 cent per share in March. Shareholders can choose cash dividend or scrip dividend.

Firstly, you need to pay a scrip fee of $150 for the 100 board lots of Company D shares you hold. Secondly, you need to pay a dividend collection fee, which is charged by your intermediary at the rate of 0.5% of the cash dividend amount, with a minimum charge of $20. The fee for handling scrip dividend is $30 flat.

In this case, the total charge is lower for cash dividend: only $170 [= $150 + $20] is payable, which is $10 less than $180[= $150 + $30] for choosing scrip dividend. The actual amount of cash dividend received is $830 after deducting charges.

Do I have to pay dividend collection charges if I hold the share certificate?

You don't have to only if you have re-registered the share certificate in your own name after they have been withdrawn from CCASS. If you fail to do so, entitlements such as dividends, bonus issues etc. declared by the listed company will still be distributed to the registered holder on the share certificate, i.e. HKSCC Nominees Limited.

To get back your dividend entitlement, you have to lodge a written application via your intermediary to HKSCC Nominees Limited together with the relevant supporting documents. CCASS charges $200 per claim, plus a collection of dividend fee.

Intermediaries usually pass this fee back to the clients, and may ask for additional charges as well, for instance, impose an administration fee for each document they are required to prepare.

Example: You fail to complete the share re-registration after withdrawing 110 board lots or 110,000 shares of Company F . Subsequent to that; Company F distributes a special cash dividend of 3 cents per share. You ask your intermediary to pursue the unclaimed dividend for you.

Assuming your intermediary requires a $200 handling charge, plus a 0.5% of fee for collection of dividend, you need to pay a total fee of $216.50 for your claim, equivalent to 6.56% of the dividend of $3,300 pursued by you.