The COVID-19 lockdowns have highlighted the inefficiencies with the payment of dividends through conventional means like cheques or bank mandates. These experiences have given renewed impetus to distribute dividends via CREST (UK’s Central Security Depository) instead. As a result, Euroclear UK & International, the owner and operator of CREST, has launched a campaign aimed at both corporates and intermediaries to employ CREST for this purpose.
There are benefits for both a corporate and its shareholders to jumping on this bandwagon. However, before doing so, it is key to understand how the CREST distribution mechanism works. There are different approaches a corporate can take and a few approaches intr