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BVT and MTN DIVS

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Not applicable
why have i been paid by mtn and bvt divs before the paydate? is this an OST mistake?
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19 REPLIES 19
SimonPB
Valued Contributor
no, we know the money is coming so we pay it ahead of it arriving ..
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Not applicable
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SimonPB
Valued Contributor
why ?? why not ??
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striker
Super Contributor
. Simon on this subject,what's the situation with the BIL div's ? The day after LDT I received a payment,later reversed,and nothing since .
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Not applicable
Because you don't have the money yet - so you are creating an unnecessary cash flow impact. I am sure that OST would have thought of this, so what is the benefit to you of paying out the dividends before the funds are received?
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SimonPB
Valued Contributor
ya, was an error .. we pay 5 days before pay date, BIL pay date is oct some time ..
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XWolf
Contributor
Cash from the future. Stop complaining :P
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Shard
Super Contributor
Do we earn interest on the Div's that get paid 5 days in advance?
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SimonPB
Valued Contributor
no, it is essentially a loan (and we don't charge for it unless you seond it, in which case you still don't pay interest as you only pay for the buy at T+5) .. and you cannot withdraw either ..
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Shard
Super Contributor
Thanks Simon, was just interested.
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Not applicable
want to clarify somethings simon. 1) do you guys settle the divs 5 biz days after LDT? in that case mtn LDT+5=today, but bvt LDT (16 sep)+5=23 sep. so why i get bvt div 2day? not complaining-just want to understand. 2)am i right in saying that we then earn paydate-LDT-5 days worth of interest for free (which would be great,but theres no free lunch so prob not)? or do we only earn the interest from the recorded paydate? thanks
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SimonPB
Valued Contributor
we pay 5 business days before pay date .. no interest is earned ..
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steve_1
Frequent Contributor
Pay date-5 = Prob re-invest. Pay date/cash settled = cash available = prob transfer from trading account
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SimonPB
Valued Contributor
we get no benefit, cept maybe happy clients ??
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steve_1
Frequent Contributor
fcourse there are benefits. Re-investing divs means trading fees, comms etc.
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SimonPB
Valued Contributor
well maybe, but not really .. for the vast majority of private clients people do not get enough div to reinvest without costs killing ..
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Not applicable
Its just numbers in a computer, you don't have the cash and you cannot access/draw it till T+5 days anyway and zero interest earned on those 5 days. Psychologically making you happy to be with a Bank that's "Moving Forward";-) and you can re-invest it if you want...
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sasa
Regular Contributor
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ET
Contributor
OST gives you the money at no cost but the only thing you can do with it is spend it on shares where they earn commission. If you got it 5 days later you might just transfer it out and then no gain for SB. Also these amounts might be smaller than your normal trades and small trades have higher margins for SB.
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