A price contract is not a share

A dividend a company pays to the register, beside a cash adjustment on a price contract

When a company pays a dividend, it pays the holders on its register on the record date. A share bought through a local broker and held in your own name at Strate is on that register, and the dividend is paid to you after dividends tax is withheld. A CFD on that share is different: no share is bought, and nothing is registered in your name at any depository. The holder of a CFD has no vote and no shareholder rights, and no dividend is paid by the company to the CFD holder.

Where a share CFD is offered, any dividend-related payment is a cash adjustment made by the broker around the ex-dividend date under its own contract terms. It is not a dividend paid by the company, and its size and tax treatment are set by the broker's terms. This site does not state those terms. Before relying on a cash adjustment, read the contract specification for the share you are trading.

Why a contract carries no last day to trade and no dividends tax certificate

The last day to trade is a date in the share register's settlement cycle: a buyer must trade by that day to be on the register on the record date. A CFD has no register and no settlement in shares, so there is no last day to trade. The broker's cash adjustment is paid around the ex-dividend date, but the timing is set by the broker's terms, not by the exchange's calendar. A CFD holder should not expect the same dates as a shareholder.

Dividends tax is withheld at source by the company or the local broker before a dividend is paid to a shareholder, and the shareholder gets a tax certificate. A cash adjustment on a CFD is not a dividend, so no dividends tax is withheld and no tax certificate is issued. The tax treatment of the adjustment is set by the broker's terms and by the holder's own tax position. This site does not state the rate of any tax or the treatment of any adjustment.

What to read in the terms and check on the FSCA register before an account is opened from South Africa

Before opening an account, read the broker's client agreement and the contract specification for the product you intend to trade. The agreement says what a cash adjustment is, when it is paid, and what it is based on. It also says what happens if a share is suspended or delisted. Do not rely on a summary; the agreement is the source that matters.

FxPro's own FAQ says it is regulated by the FSCA in South Africa. This site cannot confirm the licence number or which FxPro company serves a South African resident. Check the FSCA register yourself: search the name, read the licence categories, and confirm the status. A CFD is not recorded at Strate, and an FSCA licence does not make a CFD a share. If you want a share, use a local broker and a CSDP.

FxPro states that it is regulated in South Africa by the Financial Sector Conduct Authority (FSCA) for its South African business, but which company of the group would hold a particular reader's account, and under which licence, is not stated here: check the FSCA's register of authorised financial services providers before relying on any of it. A contract for difference on a share is not ownership of a share and is not recorded at Strate. Sending rand abroad is subject to South African exchange control rules. Nothing on this site is investment advice.