Yesterday, I said that Global Philippine Deposit Receipts (GPDRs) [MB link] would not pass dividends on their underlying shares through to GPDR holders, but this is not true. Part D of the rules expressly states that the GPDR issuer will be required to “pass on the entitlements” of the underlying shares to GPDR holders “without delay”. In this usage, the word “entitlements” means things like dividends, stock splits, rights issues, and other such distributions to shareholders. The entitlements will be received by the GPDR issuers, converted into pesos, and then passed on to GPDR holders. The specific procedure that the GPDR issuer will use to do this will be outlined in the GPDR’s prospectus.
MB bottom-line: A simple CTRL-F “dividend” would have prevented my mistake. I based my write-up on a top-down reading of the rules, but my attention and focus got a little “skimmy” toward the end of the document where the rules talked more about the administrative procedures and fees for the issuers. But in the middle of this talk of fees and responsibilities is exactly where the document talks about dividends by name. Apologies for missing that, and for confusing everybody with my multiple references to “GDPR” (instead of GPDR). Spell-check didn’t catch it because of the EU’s famous “General Data Protection Regulation” (the thing that made all of those cookie opt-in popups appear around the internet), but it’s my L to take.
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