What is the procedure for a DRIP / for fractions?

What is the procedure for a DRIP?

When a DRIP is proposed by a foreign company, a Belgian resident has to pay the foreign withholding tax as well as the Belgian withholding tax in cash. The foreign withholding tax is automatically deducted from the gross dividend. The remainder (gross dividend minus foreign withholding tax) will be used to be reinvested in stocks. The reinvestment price is determined by the company. It is most often the average price of the stock on the exchange during a certain period. A Belgian resident also needs to pay the Belgian withholding tax, which will be applied on the remainder of the dividend (gross dividend minus the foreign withholding tax). As this remainder is invested completely into stocks, the Belgian withholding tax will be deducted of the cash balance of your trading account. Consequently, you will need to provide sufficient cash on your trading account. If you fail to provide a sufficient funds, your trading account will show a negative balance, which will involve debit interest on your trading account. The exchange multiple (how many dividend rights are required to obtain one new stock) of a DRIP-dividend is not always know in advance. This means that you do not always know in advance how many stocks you'll receive.

What is the procedure for a DRIP of a French company?

When a French company distributes a DRIP, you may choose to convert the gross dividend or the remainder of the gross dividend after deduction of the foreign withholding tax into new shares. The standing operating procedure at Keytrade Bank is: the remainder of the gross dividend, after deduction of the foreign withholding tax, is used to be converted into new shares when you let us know you prefer to receive the DRIP dividend in stocks instead of cash. A Belgian resident still has to pay the Belgian withholding tax. Consequently, you will need to provide sufficient cash on your trading account. If you fail to provide sufficient funds, your trading account will show a negative balance, which will involve debit interest on your trading account. As stated, in the case of a DRIP dividend of a French company, one can choose to convert the gross dividend into shares. The impact of this choice is that the foreign withholding tax and the Belgian withholding tax are both deducted of the cash balance of your trading account. Consequently, you will need to provide sufficient cash on your trading account. If you fail to provide sufficient funds, your trading account will show a negative balance, which will involve debit interest on your trading account. If you would like the gross dividend of a French DRIP to be converted into shares, please let us know in time on the following e-mail address: corporate.actions@keytradebank.com Please don't forget to mention the following information:

• your name
• your trading account number
• your preference to receive the gross dividend of the DRIP in shares

Please be aware that the time to indicate the choice of your preference is limited!

What is the procedure for fractions?

When a choice dividend or DRIP dividend is distributed, there might be fractions of unused dividend rights left on your trading account. This is the case when not all of the dividend rights can be converted into whole new shares, because of the "conversion multiple". If the fractions equal the value of at least half a stock, Keytrade Bank will normally* convert these fractions into one new stock. If the fractions don't equal at least half a stock, they won't be used to be converted into a new stock. You will have to pay the value of the fractions needed in order to receive an entire new stock (if your fractions equal the value of at least half a new stock). On the other hand, you will receive the value of the fractions that have been sold on your account if the fractions don't equal at least half a stock. In both of the above mentioned cases, Keytrade Bank charges a transaction fee of 2,50^EUR . Exceptionally, it may occur that a dividend paying company insists that fractions of unused dividend rights are automatically not converted into a new share, even if those fractions of unused dividend rights equal the value of at least half a stock.