Dividend Reinvestment Plan
At the FY17 results on 17 August 2017, we announced that the DRP was suspended. Telstra intends to reinstate the DRP when circumstances allow. When we are in a position to reinstate the DRP we will continue to follow the existing instructions regarding participation that have been provided previously by shareholders who have elected to participate in the DRP, unless we are advised otherwise. We will publish dates for providing updated instructions at that time.
Telstra operates a Dividend Reinvestment Plan (DRP) where eligible shareholders can reinvest either all or part of their dividend payments into additional fully paid Telstra shares. No brokerage or other transaction costs are payable by shareholders on shares acquired under the DRP.
Telstra expects shares allocated to participants under the DRP to be sourced through an on-market purchase and transfer of shares to participating shareholders.
Key features of the DRP - read the DRP Rules here (PDF, 2MB)
- Participation in the DRP is optional and available to shareholders with registered addresses in Australia and New Zealand;
- No discount will apply to the allocation price under the DRP and no new share capital will be issued;
- Shareholders may participate for all or part of their shareholding and there is no minimum or maximum limit on the number of their shares that may participate;
- Shares allocated under the DRP will rank equally with existing shares on issue;
- Statements will be provided for each dividend the DRP applies to;
- Once a shareholder elects to participate, the DRP will continue to apply for future dividend payments, unless a participating shareholder advises otherwise;
- The Telstra Foundation will oversee a mechanism to donate any residual amount to selected charities. Shareholders may elect to opt out of donating their residual and roll forward any residual amount to the next payment.
Telstra recommends shareholders seek financial advice and read the full terms and conditions set out in the DRP Rules (PDF, 2MB) before deciding whether to participate.
In order to participate in the DRP for a dividend, shareholders need to ensure their DRP participation form is lodged, or their online election is made, by the relevant DRP election date.
Please refer below for further information on our DRP including Frequently Asked Questions.
Telstra’s Dividend Reinvestment Plan (DRP) enables shareholders to reinvest dividends in additional Telstra ordinary shares. Features of the DRP include:
- Increase your holding: The DRP is a convenient way of increasing your holding of Telstra shares.
- No additional costs: Shares acquired by shareholders under the DRP are free of brokerage, commission or other transaction costs.
- Participation is flexible: You may apply the DRP to part or all of your total shareholding.
- Participation is optional: You may join, vary your participation or withdraw from the DRP at any time, subject to adequate notice being given.
- Update details online: You may elect to participate, vary or cancel your DRP election online.
- Franking credits still received: DRP participation does not affect your eligibility for franking credits.
- Shares rank equally: Shares issued or transferred to you under the DRP rank equally with existing shares from the date of issue or transfer.
- Treatment of residual amounts: The calculation of the allocation of shares under the DRP normally results in a residual amount. This is because your dividend amount will be used to acquire a whole number of shares, usually leaving a residual amount which is less than the price of one Telstra share. For each dividend, the value of that residual amount will be donated to a charity or charities of Telstra’s choosing. If you want to retain your residual amount, you can elect to opt out of donating it, in which case your residual amount will be carried forward, without interest, and added to your next dividend.
- Dividend statement: For each dividend you will be provided with a dividend statement, which sets out details of your dividend amount, franking credits, the number of shares you have acquired under the DRP the allocation price you paid for each share as well as any residual amount donated/retained by you. Your dividend statement will be provided as soon as practicable after each dividend payment. This statement can be used as a tax receipt to claim your donation to charity if greater than $2.
Individual shareholders can elect to participate in the DRP online via Link Market Services website. Please follow the instructions below:
1. Go to www.linkmarketservices.com.au/telstra
2. Enter your SRN or HIN, your post code, the security code displayed and read and accept the terms and conditions.
3. Select the Payment & Tax menu option, followed by Reinvestment Plans. Under the Action column, select edit instruction and nominate your plan option.
Please note, shareholders with a joint or company holding will need to complete and return the DRP participation form available under the Reinvestment Plans menu option.
Please contact the Telstra Share Registry, Link Market Services Limited, for further information:
Who can participate?
All shareholders of fully paid Telstra ordinary shares who are resident in, and whose address on the register of shareholders is in, Australia or New Zealand may participate in the DRP, subject to certain limits (set out in the DRP plan rules).
How do I participate in the DRP?
Make your election online or complete a participation notice and return it to our share registry (Link Market Services).
Can I participate in the DRP for some of my shares?
Yes, you can nominate all of your shares or a specific number of your shares to participate in the DRP. For shares not participating in the DRP, dividends will be paid in the usual way.
When will my participation begin?
Your participation in the DRP will take effect for a particular dividend if your online election / participation notice is received by the relevant DRP Election Date. Unless Telstra determines otherwise, the DRP Election Date for a dividend will be 5:00pm (Melbourne time) on the first business day following the record date for that dividend. You can find the Telstra DRP election dates for forthcoming dividends at www.telstra.com.au/aboutus/investors/
For elections received after the DRP Election Date, participation will begin from the first dividend record date after receipt of your online election or participation notice.
If I was registered to participate in the DRP prior to its amendment on 12 February 2015, does my election still stand?
No. All participation notices and elections made prior to Telstra’s announcement of the update of the DRP Rules on 12 February 2015 no longer apply. If you wish to participate in the DRP you must make a new election online or complete a new participation notice and return it to our share registry (Link Market Services).
What happens if I have more than one shareholding?
You must lodge a separate election for each shareholding registered under different names or holding numbers.
Can I change my participation at any time?
Yes. Simply notify the share registry online or lodge a new participation notice. The variation will be effective from the next dividend payment, provided that the election is received by 5.00 pm (Melbourne time) (or such other time as Telstra specifies) on the DRP Election Date for the relevant dividend. Telstra will announce the relevant dividend record date and DRP Election Date for each dividend to the ASX at the time it announces the dividend and make it available on its website at www.telstra.com.au/aboutus/investors/
At what price will the shares be allocated?
Shares will be allocated at an average of the daily market price over a period of at least 5 trading days (Allocation Price), in accordance with the DRP Rules. The Allocation Price may be reduced by a discount, which the Board may determine from time to time and announce to the ASX. Telstra does not currently intend to offer any discount to the Allocation Price.
The Allocation Price may be determined after the DRP Election Date, so you may not know the Allocation Price when you commit to participate in the DRP. However, you will know the formula for calculating the Allocation Price and whether any discount is to be applied.
What will it cost me to participate?
Nothing. No brokerage fees, commission or other transaction costs will be payable for any shares allocated under the DRP.
Can I sell my shares when I choose?
Yes. You can sell any or all of your shares at any time. However, if you sell all of your shares and do not give Telstra notice of termination of your participation in the DRP, your participation will cease with effect from either (i) the date on which the last transfer is registered by Telstra or (ii) if the last transfer is registered after a relevant DRP record date and before the related dividend payment date, the date following that dividend payment date. This deemed termination of your participation will occur even if you repurchase shares at a later date under the same holding.
If you elect for ‘full participation’ and then sell some of your shares, the dividends on your remaining shares will continue to be reinvested under the DRP. If you elect for ‘partial participation’ and then sell some of your shares, the number of shares sold will be deemed to the full extent possible to be non-participating shares and the balance, if any, will be deemed to be participating shares under the DRP.
What about taxation?
The Australian Taxation Office currently treats dividends reinvested under the DRP in the same way as dividends received on shares which are not participating. The New Zealand Inland Revenue currently treats dividends reinvested under the DRP in the same way as dividends received on shares. Telstra takes no responsibility for the taxation consequences of shareholders participating in the DRP, and recommends you obtain professional taxation advice.
Will I receive a dividend statement?
After each dividend, a dividend statement will be provided to you in accordance with your communication election, showing details of your dividend amount, franking credits, the number of shares you have acquired under the DRP and the allocation price you paid for each share, as well as any residual amount donated/retained by you. Your dividend statement will be provided on or as soon as practicable after the dividend payment.
Can the DRP be modified, suspended or cancelled?
Telstra may alter, suspend or terminate the DRP at any time by notifying the ASX and updating the Telstra website.
What happens to any residual value after each DRP?
The application of the dividend reinvestment formula normally results in a residual amount. This is because your dividend amount will be used to acquire a whole number of shares, usually leaving a residual amount which is less than the price of one Telstra share.
For each dividend, if there is a residual amount, you are taken to have directed Telstra to donate that residual amount to one or more charities. Information on the charities will be made available on the Telstra Foundation’s website when available. Where possible, Telstra will provide information on the dividend statement sufficient for the purposes of claiming a deduction, for Australian tax purposes.
If you don’t wish to make a charitable donation, you may elect to opt out of making donations by contacting Link Market Services on 1300 88 66 77 (Australia) or 0800 835 787 (New Zealand) and updating your preferences. If you elect to opt out of making donations, then the residual amount on each dividend will be carried forward, without interest, and added to your next dividend.
What happens if I leave the DRP?
If you cease to participate in the DRP for any reason, or the DRP is suspended or terminated by Telstra, Telstra will donate any residual balance (if any) in your DRP account to a charity or charities approved by the Company. There is no ‘opt out’ mechanism in these circumstances.
Need more information?
If you have further questions (other than on taxation) about how the DRP operates and how you can participate, please contact Link Market Services on 1300 88 66 77.