All Romanian companies listed on the Bucharest Stock Exchange (BVB) should pay their dividends centralized, through the Central Depository, starting next year, according to market representatives.

“We hope that by the end of the year we will implement centralized dividend payment for listed companies,” Ludwik Sobolewski, CEO of the Bucharest Stock Exchange said on Thursday, June 12.

This means that all issuers who will distribute dividends will send the money to the Central Security Depository, which holds the records for all the shareholders of the companies listed on the BVB.

The Depository will pass the money forward to custodian banks or brokerage firms, who will then distribute the money to their own clients, according to the number of shares they hold at the registry date for dividends, he explained.

“This will ensure that all investors get the dividends in the same day, which means equal treatment for all investors. The cost for issuers is also lower,” Sobolewski concluded.

Currently, each listed company on the Bucharest Stock Exchange can choose its own way to pay dividends. One in five companies currently pay their dividends through Depozitarul Central, while others chose local banks.

For each company, dividend payment procedure is different and generally investors need to fill in different forms to different banks to get their dividends paid, which makes it both complicated and time consuming, which in the end leads to bigger costs.

Andrei Chirileasa, andrei@romania-insider.com