If you recall, in our June 9 Update we mentioned there were two market correction actions that had yet to be taken:
- Removal of the inability to collect dividends with a pending sell order
- Adding a 40% rule
The 40% rule is related to dividend collection eligibility. If a member owns more that 40% of a Public cause, dividends are not paid until their ownership is less than 40%.
- Dividends continue to be paid while the cause is Private
- There is no limit to the number of shares a member can own in a cause
- When collecting dividends, if a member owns more than 40% of the shares in the cause, they will receive a message when they attempt to collect dividends:
“You own XXXX shares. This is more than 40% of the shares in this cause. No dividend is paid due to the 40% rule.”