£SOM Dividend payment delay issue.

Monday, Dec 03 2018 by
2

Hello,

This is the response I got from my IR contact at Somero Enterprises Inc (LON:SOM) when I asked what could be the possible cause for the delay in payment.
I replied, that this kind of thing will impact sentiment and as such they should take it seriously.
I have left her email on in case any other holders which to express their frustration.
Regards
Paul

Mr. Hawkins,

We do pay in USD as reflected in the announcement and we get questioned on this with nearly every dividend payment. I have again reached out to our Registrar on your specific inquiry and they provided the following explanation:

What is likely the case is the cheque will have gone to the brokers. I don’t see AJ Bell on the register so it is likely they hold their shares through someone like Pershing Nominees.

So what will happen is we pay Pershing a cheque, they wait until it clears before passing this onto A J Bell, who then in turn passes this onto the underlying holder. As you can imagine this can sometimes take a little while.

Unfortunately, neither we nor our Registrar have any control over the processing of the dividend payments once it is released to the brokers. The relationship between A J Bell and their custodian is not something that we have visibility into nor the ability to influence.

I’m sorry that I can’t be of further help on this matter. I would hope that your broker has received and processed the dividend payment by now as it seems impossible that it would take this long for funds to clear.

Kind regards,


_______________

JENNIFER OLIVER
Director of Legal & Corporate Affairs
Investor Relations & HR

Somero Enterprises, Inc.
14530 Global Parkway
Fort Myers, FL 33913 USA
p: +1-239.210.6529
m: +1-603.540.6010
Oliver, Jennifer

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35 Posts on this Thread show/hide all

bluecurve 7th Dec '18 16 of 35

In reply to post #425448

Yes, It was for about $40,000 I remember. I think in a situation like this that Somero Enterprises Inc (LON:SOM) would have sent a cheque to the custodian for the full amount of the dividend for all shares held in it's custody. Hence, likely to be in the $,000s. The custodian then "divis" out the correct amounts to each account (pardon the pun)!

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bluecurve 7th Dec '18 17 of 35

In reply to post #425578

Looks like the AJ Bell (LON:AJB) is up 33% on the IPO price. Plenty of volume at the 215p level. I bought some in the IPO but was scaled back by over 57%. Won't be chasing it at this level, but looks like it will be popular.

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hawkipa 11th Dec '18 18 of 35
1

Morning all, Just had the following from AJ Bell. I have immediately forwarded on to Jennifer at Somero. It does highlight a few issues to me, one of which being the charge imposed by AJ Bell for FX payments, when they clearly don't pay for the service themselves. BoA will just make a spread trade price for the transaction.
It is not clear who exactly the fault lies with, but it is clear it is an issue and why AJ Bell don't have a USD account is beyond me. I have asked for clarification from AJ Bell on the exact mechanics of the payment process. Will be interesting to see if they expose themselves with regards to an unjustified FX charge.

Finally, any of those affected, please do email Jennifer Oliver as only sustained pressure will result in a change of mindset. Oliver, Jennifer - joliver@somero.com

Regards
Paul

Please be advised, we will not appear on the shareholder register as AJ Bell or as Pershing Nominees (not entirely sure who they are). We
will appear under our nominee name, which is Lawshare Nominees Ltd.

To confirm, we have received the currency cheque. However, this was sent to the bank to clear. The bank then sends this onto the
clearing bank, which in this case is Bank of America. Unfortunately, the delay lies with them, which according to them is because of a
"large backlog of currency cheques". We are continuing to chase as much as possible and hope to have this credited to your account in
due course.

If you have any further queries, please feel free to contact us.

Yours sincerely

Aaron Willsher
Dealing Services Team

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timarr 11th Dec '18 19 of 35

In reply to post #426093

Will be interesting to see if they expose themselves with regards to an unjustified FX charge.

Not sure what "expose" means - the 0.5% FX charge on foreign currency dividends is in their standard rates and charges table, so it's hardly a secret. You sign up for the service, you pay the fees.

Generally, I find AJ Bell FX dividend payments are deposited fairly quickly. For instance the Apple dividend payment date was 15th November and the dividend was in my account the same day (the FX charge took another 4 days to levy). Somero is a consistent outlier which suggests to me that the problem is more likely to lie on their side than AJ Bell's, possibly due to their quaint, old fashioned insistence on using cheques to make the payments.

As an accountholder and a shareholder I certainly don't want AJ Bell introducing new processes and costs just to deal with a specific problem with a specific company, even if that means it could speed up the dividend payment in that instance.

timarr

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simoan 11th Dec '18 20 of 35
1

Hi timarr,

Somero is a consistent outlier which suggests to me that the problem is more likely to lie on their side than AJ Bell's, possibly due to their quaint insistence in using cheques to make the payments. 

As an accountholder and a shareholder I certainly don't want AJ Bell introducing new processes and costs just to deal with a specific problem with a specific company, even if that means it could speed up the dividend payment in that instance. 

I agree that a large part of the blame is with Somero here. What on earth are companies doing sending out currency dividend cheques in this day and age? I confirmed with the registrar that there is no wire transfer option for AJ Bell to use. In particular, Somero is only listed in the UK and so while I'm quite happy for it as a US company to declare dividends in USD, I seen no reason why it cannot pay UK based investors in GBP as other companies do.

HOWEVER, AJ Bell could easily be more  customer friendly and do what other brokers do and pre-credit accounts with the dividend on receipt of the cheque. So once again, they are out of line with industry practice, just as in the FOS case that was found against them relating to "treating customers fairly" with regard to exit charges. 

I'm a shareholder too, but there are clear inadequacies with the company behind the scenes. I won a FOS case against them and they basically ignored the Ombudsman and missed the agreed compensation payment deadline by several weeks. I have now received two cheques one of them for only £23 sent by registered mail at a cost of £6.50 for one account. I received a second larger cheque for another account about a month later, again sent by registered post under duress from the Ombudsman and this included an additional £50 fine imposed for late payment. Honestly, behind the facade of the fancy website the back office is a mess. As such, I have limited the number of accounts and amount of funds I hold with the company.

All the best, Si


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timarr 11th Dec '18 21 of 35
1

In reply to post #426148

Hi Si

That's interesting. My experience of AJ Bell is quite different and, of course, we're all biased by our experiences. What we can definitely say is that one of us is a victim of base rate neglect :-/

As for Somero, while I'd agree it's odd that AJ Bell don't have a streamlined process for dealing with this given that they don't I can't see that this constitutes a case for doing so. Rather Somero need to move off late sixteenth century technology - although I suppose that gives them the problem of what to do with their crack team of quill wielding cheque writers :-)

timarr

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simoan 11th Dec '18 22 of 35

In reply to post #426173

That's interesting. My experience of AJ Bell is quite different and, of course, we're all biased by our experiences.

Yes, very true, but you only really find out how good a company is when something goes wrong and/or how they act on behalf of their customers. I have been with company right back to the original Sippdeal/ James Brearley days and have had numerous problems with them over the years including losing entitlement to right issues etc. because of their poor service.

The fact remains that they sucked in customers with fee free accounts and then imposed a new fixed charging structure on those accounts whilst still imposing exorbitant transfer out/exit charges. I don't know about you but I don't like feeling like a frog luxuriating in a pot of warm water... To make matters worse and infuriate me even further, we received a letter from Andy Bell telling us that the changes were "revenue neutral", talk about insulting peoples intelligence! And every other broker who has ever done this (to my knowledge) has provided a fee free transfer out period, but not AJ Bell. 

As for Somero, while I'd agree it's odd that AJ Bell don't have a streamlined process for dealing with this given that they don't I can't see that this constitutes a case for doing so. Rather Somero need to move off late sixteenth century technology - although I suppose that gives them the problem of what to do with their crack team of quill wielding cheque writers :-)

I thought that's what I said? :-) IMHO part of this problem lies with Somero Enterprises Inc (LON:SOM) paying dividends by  USD cheque. It's simply not good enough as we enter 2019.

All the best, Si

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slopsjon 13th Dec '18 23 of 35

"Further to the message I sent yesterday, our Dividends Team have confirmed that the delay still lies with Bank of America, who are the clearing bank we use for processing currency cheques. Due to the delays experienced with this dividend and a couple of others, we have agreed new services with our bank that should allow funds from cheques to be paid to us much quicker going forward.

Some brokers pre-fund dividend payments prior to receiving the funds. However this is not a service that we offer I'm afraid. "




So there was something that AJ Bell could have done to speed this up.

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simoan 13th Dec '18 24 of 35
1

In reply to post #427148

So there was something that AJ Bell could have done to speed this up.

Did you not read my post above? This is not a new problem. it is something I have been rattling AJ Bell's cage about for several years to no avail. At least now it seems others are complaining too and we are at last getting some traction.

All the best, Si

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slopsjon 13th Dec '18 25 of 35

In reply to post #427163

Yes I did read the above but it didn't include the bold I received from them this morning.

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simoan 13th Dec '18 26 of 35

In reply to post #427288

Yes I did read the above but it didn't include the bold I received from them this morning.

Yes, it's new news, and a small positive, but the delay with this Somero dividend is exceptional. It usually takes 3 weeks or so, which is still crap. I assume even with this change of arrangement with their bank that the dividend will still get credited much later than by other brokers. So a small victory but it would be better if they just admitted they were out of line with industry practice and pre-credited the dividend like everyone else. No sign of that yet.

All the best, Si

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simoan 13th Dec '18 27 of 35
3

In reply to post #427298

Well, I finally received the Somero Enterprises Inc (LON:SOM) dividend today in my account. I just love the way they back date it on the cash statement page, so you have to go all the way back to 17/10 to find it.

Si.

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jjis 14th Dec '18 28 of 35

In reply to post #424378

This is weird & seemingly not a problem restricted to AJ Bell. On checking an account we have with X-O as of today the Somero Enterprises Inc (LON:SOM) dividend has still not been credited, even though an earlier poster No 8 said they (X-O) had credited their SOM dividend promptly. Weirdly on checking back I note the final dividend & special in April were credited on the payment date.

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stepone 18th Dec '18 29 of 35

How do you know they were actually credited on the payment date? Simoan above said that the dividend turned up late, but when it did show it was back-dated date so it appeared to have arrived on the correct date. I've seen the same with my brokers in the past, which is why I started noting down in the comments of my spreadsheet how long it took for the dividend to arrive. Not that it helps :-(

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LeoInvestorUK 2nd Jan 30 of 35

I normally avoid reproducing communications sent to me, but given that they delete messages from my inbox after a month and there seems to be ongoing disagreement about what went wrong here, this what they sent to me on 6/12/2018. The emphasis is mine and I have only removed names:

Dear Mr ****,

Thank you for your message.

Please be advised the registrar made payment in the form of a cheque, unlike other brokers we do not pre fund dividend payment. All funds have to be cleared from the receiving bank, currently the registrars receiving bank has a back log of cheques

This is then causing the delay in AJ Bell receiving payment, we are in talks with the bank and registrar to try and steam line the process. 

We are unable to provide time scale as to when the payment will be made.

This matter isnt an error of AJ Bell, however due to the registrar receiving bank.

We are treating this matter as urgent, I can only apologise for the delay. 

I have submitted this to the dividends team as a formal complaint, they will write out to you within the next 5 working days.

Again I can only apologise for the delay. 

If you have any further queries, please feel free to contact us.

Yours sincerely

**** ****
Dealing Services Team

My understanding from this was that AJ Bell blame the Somero's registrar's bank. Somero chose their registrar who chose their bank so therefore this is Somero's fault.

Since AJ Bell clearly say that it is not their fault, I can't see how this would square with a problem with AJ Bell's choice of bank, nominee or nominee's bank. Yet this contradicts their response given to slopsjon, where they seem to say it is due to AJ Bell's choice of clearing bank:

Further to the message I sent yesterday, our Dividends Team have confirmed that the delay still lies with Bank of America, who are the clearing bank we use for processing currency cheques.

Can somebody explain what they think actually happened?

In principle I don't think it would be fair to take AJ Bell's attempt to streamline the process in future as an admission of guilt - just good practice.

Blog: LeoInvestorUK
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Laughton 2nd Jan 31 of 35

Maybe the lesson is not to hold overseas company shares with AJ Bell.

I have the same problem with long delay in receiving my Taptica International (LON:TAP) dividends. Other broker managed to credit my account for the last dividend on November 23. As of this morning I am still waiting for AJ Bell to pay me.

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luckym 2nd Jan 32 of 35

In reply to post #427453

Coming late to this thread, but just to report that Halifax Share Dealing seems to do better with Somero Enterprises Inc (LON:SOM) dividends with respect to speed of payment. For example, the last dividend with pay date of 17 October was paid into my (ISA share dealing) account on 26 October and reinvested on the same date. It's not all good news though, Halifax are not interested in handling my W-8BEN form as they don't receive the dividend payment directly but rather via the UK settlement market, (CREST). Consequently, I pay more tax than I should. I might try to pursue CREST at some point - has anyone tried this?

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peterg 2nd Jan 33 of 35

This matter isnt an error of AJ Bell, however due to the registrar receiving bank.

This seems confusing terminology to me. If the registrars send out divs as a cheque, then it is surely AJB's choice which bank receives the cheque. And that seems to be where the bottleneck arises - combined with their approach to not crediting accounts until funds have completely cleared.

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timarr 2nd Jan 34 of 35
2

In reply to post #431593

OK - so the cheque needs to be cleared - i.e. the actual funds transfered from the source (Somero) to the recipient (AJ Bell in this case). The cheque is simply a promise to pay, not an actual transfer of funds.

The receiving bank is probably the source of the funds - it's the registrar's bank, acting on behalf of Somero. The clearing bank is responsible for managing the movement of the funds from source (Somero, or their account at their registrar's bank) to the destination (AJ Bell's bank account).

If the problem is at the receiving bank then it's a Somero issue. If it's at the clearing bank it's an AJ Bell issue. The terminology in the thread above is muddled to the point where it looks like the people writing the messages don't really understand this themselves (and that's not surprising, it's bloody confusing).

Anyway, the hold up could be at the clearing bank, who are slow to process and submit cheques for clearing or at the receiving bank, who are slow to credit the accounts. Of the two the former is far more likely as FX cheque clearing is notoriously slow, while there's no reason the receiving bank should be slow to credit as they have nothing to gain by doing so.

At a guess BoA is the clearing bank and AJ Bell have now agreed a faster process for processing and submitting cheques to the receiving bank for clearing. As has been pointed out above many brokers simply credit the dividend payment when it's due and handle the underlying delay transparently to their customers. The risk associated with that is tiny, I don't think I've ever heard of a dividend payment not actually being made after the payment date.

Of course all of this would be irrelevant if Somero stepped into the mid 20th century and used Electronic Funds Transfer to make payments.

And if anyone understands that then congratulations ...

timarr

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Edward John Canham 2nd Jan 35 of 35

Somero Enterprises Inc (LON:SOM)

Just want to say that I've held Somero Enterprises Inc (LON:SOM) in bigger and smaller amounts over the last few years with several brokers.

There has never been a delay more than a few days in my account being credited with the dividend - last time around it was the next working day.

The one thing different is I have never used AJ Bell.

Go figure.

Phil

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