Will I receive substitute dividend?

You may receive substitute dividend only if you carry a debit balance in your margin (Type 1) account and your shares are loaned out by your financial institution.

If you do not carry a debit balance or if you carry a debit balance but your shares are not loaned out will not receive substitute dividends.

If you have a debit balance in your margin account:

Many financial institutions have instituted programs to avoid, where possible, lending stocks about to pay a dividend over the record date. Loaned securities that cannot be recalled or bought in will be allocated to investors who were long the security in a margin account carrying a debit balance. The substitute dividend is allocated by a random lottery. If you are allocated substitute dividend, the dividend will be designated as such on your monthly statement.

Can I determine in advance if a substitute dividend will be received?

Usually not, but it depends on the financial institution. Some financial institutions use the random lottery method, in which case it is not possible to tell beforehand. When substitute dividends will be allocated based on a lottery system, it is impossible to determine the outcome in advance.