Securities administration - Czech Republic
Income collection
| Market Record date | Ex-date | Basis for entitlement | Standard interest calculation rule | |
| Coupon payment | Ex-date -1 | Payment date -30 calendar days | Settled position on record date | Variable - most often ACT/360 or 30E/360 |
| Dividend payment | Determined by the GM | Record date -1 | Settled position on record date | Not applicable |
The AGM sets the payment date, which must be after the AGM. The “payment date” announced by the issuer represents in fact the first date when the issuer will start to process the dividend distribution and so does not mean the date on which the dividend is actually paid to the investor.
In law, the issuer has three months after the AGM to pay out the dividends. Market practice is that approximately 90% of issuers pay on the first day of the payment period. Within the first two weeks, approximately 100% of issuers pay out dividends to their shareholders.
Payment itself is done by wire transfer through the CNB Clearing Centre to the account of the securities holder or as agreed before the payment date between the issuer (or its paying agent) and the custodian.
Corporate actions
Most common corporate events
The most common events in the Czech market are Dividend announcements, Rights issues, Name changes, Mergers, Redemptions, Tender offers.
Organisation of AGM/EGMs
The majority of the GMs are held in April, May and June based on the availability of the audited financial accounts. A regular GM must be held within the period of six months following the end of the accounting year.
The shareholder’s voting eligibility is determined based on settled position on the record date. In the case of dematerialised shares, the record date can be specified by the Articles of Association. The record date cannot be more than 30 calendar days before the GM; for stocks traded on the regulated market the record date will be seven calendar days before the meeting. Share blocking has been abolished.
The Articles of Association of the company may allow participation at the GM electronically and voting without physical attendance.
Other market specifics
In the case of book-entry securities, entitlements are established only when securities are registered on record date at CSD Prague. If the securities are not credited on record date to CSD Prague account owing to counterparty failure, claims can be issued on behalf of the investor for lost rights and entitlements either directly or through the Exchange Court of Arbitration (when the PSE member is involved) or through a Court. Market practice is that due entitlements are claimed directly on the counterparty.
The actual shareholder's entitlement may differ in the case of late settlement as of record date.