& Securities

Yesterday, Nasdaq published an Issuer Alert (2017-001) clarifying the implications of the T+2 transition to dividend procedures of listed companies. As discussed in our earlier blog post on the upcoming T+2 transition, Nasdaq has amended Rule 11140 to shorten the time between the ex-dividend date and the record date for issuing dividends from two days to one day (consistent with T+2) effective September 5, 2017.

Regular Distributions

According to Nasdaq, listed companies should be aware that the first record date to which the new ex-dividend date timing will be applied will be Thursday, September 7, 2017. The chart below describes the anticipated “regular” ex-dividend dates over the conversion period:

Record Date September 5, 2017 → EX date August 31, 2017

Record Date September 6, 2017 → EX date September 1, 2017

Record Date September 7, 2017 → EX date September 6, 2017

We note that September 4, 2017 is Labor Day and not a business day.

Large Distributions

Nasdaq Rule 11140(b)(2) establishes the ex-dividend date for cash dividends or distributions, stock dividends and/or splits, and the distribution of warrants, which are 25% or greater of the value of the subject security. These distributions are declared ex-dividend on the first business day following the payable date for the distribution.  According to Nasdaq, in order to avoid an ex-dividend date of September 5, 2017 under this rule, listed companies are advised not to set September 1, 2017 as the payment date for any dividend or distribution that may exceed 25% of the value of the subject security.