Dividend Arbitrage - RD:IR

The level of stock lending around ex-dividend dates spikes in roughly one third of FTSE 350 companies. But why? Dividend arbitrage (also known as dividend washing) is a trade that enables investment firms to reduce their tax bill relating to dividend payments. The method used is to place shares in alternative tax jurisdictions around the ex-dividend date so that less withholding tax will be paid. There is little that an IR professional can do in relation to dividend arbitrage, aside from understanding the mechanics behind this trade and being able to explain to senior management why trade volumes are increasing, yet the augmented volumes are not necessarily flowing through to significant changes in the constitution of the share register month on month.

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RD:IR is an independent global Investor Relations consultancy offering a wide range of IR-related analysis, research & advisory services to over 600 UK & international public companies. We provide unconflicted advice on investor marketing and communication strategies to assist boards, senior management and IR professionals to manage their relationships with the capital markets. Our business & approach is global, but we take pride in our customer service & focus.

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Mark Robinson
RD:IR
020 7492 0537
mark.robinson@rdir.com

Published 5 July, 2019

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