This article is about in-house dividend reinvestment (DRIP) and will cover the following topics:
- What is in-house dividend reinvestment?
- What should you do?
- Timeline for processing in-house DRIPs
- Are there any special conditions or charges for in-house dividend reinvestment?
- Is there any specific security or it's available for all securities offered by Saxo for trading?
What is in-house dividend reinvestment?
An in-house dividend reinvestment event is offered by Saxo and this allows you to reinvest your dividends for new shares even though the event is announced as Cash dividends by the Issuer. This will create an opportunity for you to reinvest your dividends to purchase stocks of the respective issuer company.
What should you do?
Saxo manufactures the in-house dividend reinvestment plan to give you an opportunity to reinvest the dividends from specific securities. There is no specific user action required to participate in the event as compared to "dividend reinvestment".
You may participate in the in-house dividend reinvestment plans as follows:
- By setting up the standing instructions (dividend instructions).
- By making an election in the event on the platform
If you have already set up "dividend instructions", the same would be applied for in-house dividend reinvestment as well.
Timeline for processing in-house DRIPs
Currently, in Saxo, in-house dividend reinvestments are processed based on the average rate captured from the stock bought on your behalf.
The shares are bought on the payment date itself in the pre-open session or when the market opens, and following when corporate actions process this into your account. It takes approximately 2-3 hours to complete this activity.
As a standard timeline to complete this activity and payout proceeds, it is expected to be completed by market opening + 3 hours on the defined pay date of the event.
Are there any special conditions or charges for in-house dividend reinvestment?
Currently, in-house dividend reinvestments are facilitated only for the Amsterdam market. Other market events should be followed as per the market announcement made by the Issuer.
- Re-investment is made based on the net dividend amount (net of taxes) and at the lower unit only.
- The default option in the event will be to receive cash.
- This service will not be invoiced unless otherwise instructed by you.
- The re-investment price will be a weighted average of the stock bought for the re-investment on pay-date.
Commissions will be charged as follows:
- 1% of net reinvestment value
- Minimum commission – 0.5 Euro
- Maximum commission – 10 Euro
Is there any specific security or is it available for all securities offered by Saxo for trading?
Eligible security for an in-house dividend reinvestment plan has been listed as follows:
