Domestic securities firms have decided one after another to pay overseas stock dividends even on public holidays. Following Kakao Pay Securities, users of NH Investment & Securities, Kiwoom Securities, and Toss Securities—four securities firms in total—will be able to receive overseas stock dividends during the Chuseok holiday.
Until now, domestic investors had to wait until the next business day if the dividend payment date fell on a public holiday, but with dividends now available during the Chuseok holiday, investment convenience is expected to improve.
According to the financial investment industry on the 2nd, Toss Securities decided that day to credit overseas stock dividends to customer accounts during the upcoming Chuseok holiday. After temporarily operating a dividend payment service on Liberation Day, it overhauled the related system and converted it into a full service. Toss Securities is also reviewing dividend payments on Saturdays as well as public holidays.
Kiwoom Securities will, for the first time, pay dividends on public holidays during this Chuseok holiday. However, it plans to limit the service to stocks that many customers hold, not all issues. Large-cap names such as Nvidia and Nike and monthly dividend products such as JEPI are included. Individual notification texts will be sent to eligible customers.
NH Investment & Securities has also joined the public holiday dividend payment service. During the Chuseok holiday, investors can receive not only trade settlement and foreign exchange services but also cash dividends without delay. Weekends are excluded. NH Investment & Securities said, "Since overseas markets do not stop even during domestic holidays, we launched the related services so that customers' overseas stock investing is not disrupted."
With the "public holiday dividend service," investors' reinvestment opportunities are expected to expand. Because dividends can be immediately put back to work, the compounding effect can be maximized. The compounding effect refers to a phenomenon in which the interest that accrues on the initial principal is added back to the principal, causing interest revenue to snowball over time.
Typically, when overseas stock dividends are paid on a domestic public holiday, investors can receive them on the next business day. That is because the Korea Securities Depository (KSD)'s automatic rights allocation transmission system (CCF), which handles dividend payments, does not operate on public holidays. For example, if U.S. stock dividends occur during this Chuseok holiday, investors would have been able to receive the dividends only after the 10th of this month, when the holiday ends.
However, securities firms have recently begun paying dividends even on public holidays through processes such as independently developed dividend data extraction and uploads. In August, Kakao Pay Securities was the first to establish such a process. Kakao Pay Securities pays overseas stock dividends on both weekends and public holidays.