For clients’ long stocks or index markets we pay out 90% of the gross individual stock dividend or index dividend and we retain 10% for withholding tax purposes. For short positions the clients pay 100%.
For example, for a client long 1,000 shares in BP with a 5p dividend we pay out to clients who have held the position over the ex-dividend date (1000*0.05=£50) x 90% = £45. If the client were short they would have paid £50.
Cash Indices will also have dividend adjustments made when the composite companies in the index go ex-dividend. This will be credited to your account if you are long, and debited if you are short, and will come under the heading ‘Dividend Adjustment’.