FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of December, 2006
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt about this document or as to the action you should take, you should
consult a stockbroker, solicitor, accountant or other appropriate independent
professional adviser.
If you sold or transferred all or some of your ordinary shares on or before 21
November 2006, but those shares are included in the number shown in box 1 on the
accompanying Form of Election or Entitlement Advice, you should, without delay,
consult the stockbroker or other agent through whom the sale or transfer was
effected for advice on the action you should take.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this document, makes no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this document. The
ordinary shares of HSBC Holdings plc trade under stock symbol 5 on The Stock
Exchange of Hong Kong.
HSBC
5 December 2006
Dear Shareholder
SCRIP DIVIDEND SCHEME AND PAYMENT OF DIVIDENDS IN UNITED STATES DOLLARS,
STERLING OR HONG KONG DOLLARS
On 6 November 2006, your Directors declared a third interim dividend for
2006 of US$0.15 per ordinary share, payable on 18 January 2007. You may elect
to receive:
1. a scrip dividend of new shares at a 'Market Value' of US$18.7596
(GBP9.65) per share;
2. a cash dividend in United States dollars, sterling, or Hong Kong dollars; or
3. a combination of cash and scrip dividend.
For illustration, using the exchange rates on 28 November 2006, the third
interim dividend in sterling and Hong Kong dollars would have been approximately
GBP0.077 and HK$1.166. The precise amounts which will be payable per ordinary
share in either sterling or Hong Kong dollars on 18 January 2007 will be
converted from United States dollars using the exchange rates on 8 January 2007
as explained on page 2. Please read this letter carefully.
1. Scrip dividend
______________
If you have already given standing instructions to receive new shares under
the Scrip Dividend Scheme, you will find an Entitlement Advice enclosed
with this letter. You need take no further action if you wish to receive
the number of new shares shown on the Entitlement Advice. If you do not
wish to receive the maximum entitlement to new shares, a letter revoking
your standing instructions must be received by the appropriate Registrars,
at the address given on page 8, by close of business on 3 January 2007. If
you wish to receive new shares in respect of only part of this dividend, or
if you wish to receive your cash dividend in any combination of United
States dollars, sterling and Hong Kong dollars, please also ask the
Registrars for a Form of Election in time to return it to them by 3 January
2007.
If you have not previously given standing instructions to receive new
shares under the Scrip Dividend Scheme and you wish to receive new shares
in lieu of the cash dividend, you should complete and sign the Form of
Election enclosed with this letter and return it to the appropriate
Registrars, at the address given on page 8, by 3 January 2007. If you take
no action, you will receive the dividend in cash in the currency indicated
on the Form of Election. We will calculate your entitlement to new shares
using a 'Market Value' of US$18.7596 (GBP9.65) for each new share. An
explanation of the calculation of 'Market Value' and the basis of allotment
of new shares is set out in paragraphs 2 and 3 of the Appendix to this
letter.
Since fractions of shares cannot be issued, if you have elected to receive
the maximum entitlement to new shares, any residual dividend entitlement
will be carried forward in United States dollars. This will be added to the
next dividend to determine the number of new shares to be received on that
occasion. Residual dividend entitlements carried forward will not bear
interest.
The scrip dividend alternative will enable shareholders to increase their
holdings of shares without incurring dealing costs or stamp duty. However,
the scrip dividend on shares held through the American Depositary Receipt
programme or Euroclear France, the settlement and central depositary system
in France, will be subject to Stamp Duty Reserve Tax, currently 1.5 per
cent of the Market Value. To the extent that shareholders elect to receive
new shares, the Company will benefit by retaining cash which would
otherwise be payable by way of dividend. The Appendix to this letter sets
out details of the Scrip Dividend Scheme and provides a general outline of
the tax considerations in the United Kingdom and overseas. Please read the
next section regarding the payment of dividends in cash, even if you wish
to receive your dividend in the form of new shares.
2. Cash dividend
_____________
If your shares were recorded on the Principal Register at close of business
on 24 November 2006, you will automatically receive any dividends payable
to you in cash in sterling, unless you have previously elected to receive
payment in United States dollars or Hong Kong dollars. However, if your
address is in the United States you will automatically receive any
dividends payable to you in cash in United States dollars, unless you have
previously elected to receive payment in Hong Kong dollars or sterling.
If your shares were recorded on the Hong Kong Overseas Branch Register at
close of business on 24 November 2006, you will automatically receive any
dividends payable to you in cash in Hong Kong dollars, unless you have
previously elected to receive payment in United States dollars or sterling.
If your shares were recorded on the Bermuda Overseas Branch Register at
close of business on 24 November 2006, you will automatically receive any
dividends payable to you in cash in United States dollars, unless you have
previously elected to receive payment in Hong Kong dollars or sterling.
The currency in which any dividends payable to you in cash are to be paid
is stated on the accompanying Form of Election or Entitlement Advice. If
you wish to give standing instructions to receive such dividends in one of
the other available currencies (United States dollars, sterling or Hong
Kong dollars), you should complete the One Currency Election on page 2 of
the Form of Election or Entitlement Advice. Completion of the One Currency
Election will not revoke a standing instruction to receive the maximum
entitlement to new shares under the Scrip Dividend Scheme.
3. Combination of cash and scrip dividend
______________________________________
If you wish to receive this dividend in a combination of the available
currencies or in a combination of cash and new shares, you must complete
Section B on page 1 of the Form of Election. If you have received an
Entitlement Advice with this letter and not a Form of Election, and you
wish to receive your dividend in cash, in any combination of the available
currencies, or in a combination of cash and new shares, you should write to
the appropriate Registrars, at the address given on page 8, to revoke your
standing instructions for scrip dividends and to request a Form of Election
in time to return it to them by 3 January 2007.
Dividends payable in sterling or Hong Kong dollars on 18 January 2007 will
be converted from United States dollars at the forward exchange rates
quoted by HSBC Bank plc in London at or about 11.00 am on 8 January 2007.
The exchange rates will be announced to the London, Hong Kong, New York,
Paris and Bermuda stock exchanges.
Dividend warrants and, where applicable, new share certificates are
expected to be mailed to shareholders on or about 18 January 2007.
Whether you elect to receive your dividends in cash or in shares, it is
recommended that you complete and return the Dividend Payment Instruction
on page 2 of the accompanying Form of Election or Entitlement Advice so
that any dividends payable to you in cash can be sent to your bank
account(s) as you require. It is not necessary for you to complete the
Dividend Payment Instruction if you have already given instructions for
cash dividends to be sent direct to your bank account and you do not wish
to change those instructions.
Yours sincerely
R G Barber
Group Company Secretary
APPENDIX
SCRIP DIVIDEND SCHEME ('THE SCHEME')
1. Terms
The Scheme, authority for which shareholders renewed at the Annual General
Meeting on 31 May 2002 for a further five-year period, will apply in
respect of the second interim dividend for 2006.
Holders of ordinary shares on the Principal Register as at the close of
business in England on 24 November 2006 or on the Hong Kong Overseas Branch
Register as at the close of business in Hong Kong on 24 November 2006 or on
the Bermuda Overseas Branch Register as at close of business in Bermuda on
18 August 2006 (other than those shareholders referred to below) will be
able to elect to receive new shares in respect of all or part of their
holdings of shares (see paragraph 3 below) as an alternative to receiving
the second interim dividend for 2006 of US$0.15 per share in cash.
The new ordinary shares will be issued subject to the Memorandum and
Articles of Association of the Company and will rank equally with the
existing issued ordinary shares in all respects.
2. Market Value
The 'Market Value' is the average of the middle market quotations for the
ordinary shares on the London Stock Exchange, as derived from the Daily
Official List, for the five business days beginning on 22 November 2006
(the day on which the shares were first quoted ex-dividend). Since the
dividend is declared in United States dollars, the average of the middle
market quotations of GBP9.65 was then converted into United States dollars
using the exchange rate quoted by HSBC Bank plc in London at 11.00 am on 28
November 2006, giving the Market Value of US$18.7596 for each new share.
3. Basis of allotment and examples
Your entitlement to new shares is based on:
(a) the Market Value (as defined in paragraph 2 above) of US$18.7596 per
share;
(b) the cash dividend of US$0.15 per share; and
(c) the number of shares held by you on 24 November 2006
('the record date').
The formula used for calculating your entitlement is as follows:
Number of shares held at the record date x cash dividend per share
+ any residual dividend entitlement brought
forward = maximum dividend available for share election
__________________________
Maximum dividend available = maximum number of new
Market Value shares (rounded to the
nearest whole number)
You may elect to receive new shares in respect of all or part of your
holding of ordinary shares. No fraction of a share will be issued.
If you elect to receive the maximum number of new shares in lieu of your
dividend, a residual dividend entitlement may arise, representing the
difference between the total Market Value of the new shares and the maximum
dividend available on your shareholding. This residual dividend entitlement
will be carried forward in United States dollars (without interest) to the
next dividend (see Example 1).
If you choose to take only part of your dividend as new shares, you will
receive the balance in cash (see Example 2).
Example 1
If you have 1,000 ordinary shares, your maximum entitlement will be
calculated as follows:
Your cash dividend (1,000 x US$0.15) US$150.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
_________
Maximum dividend available _________ US$154.00
US$154.00 _________
_________
Number of new shares = =8.2091 = 8 new shares
US18.7596
Total Market Value of 8 new shares = 8 x US$18.7596 US$ 150.08
Plus residual dividend entitlement carried forward
(US$154.00 - US$150.08) US$ 3.92
__________
__________
US$ 154.00
__________
Example 2
If you have 1,000 ordinary shares and a residual dividend entitlement
brought forward of, say, US$4.00, your maximum entitlement will be 8 new
shares, as shown in Example 1. Should you wish to receive only 5 new
shares, you should insert this number in the appropriate box in Section B
(i) on the Form of Election. The cash balance due to you would then be
calculated as follows:
Your cash dividend (1,000 x US$0.15) US$ 150.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
__________
__________
Maximum dividend available US$ 154.00
__________
Total Market Value of 5 new shares = 5 x US$18.7596 US$ 93.80
Plus cash balance (US$154.00 - US$93.80) US$ 60.20
__________
US$ 154.00
__________
In addition to the 5 new ordinary shares, you will receive a cash balance
of US$60.20. The cash balance will be paid to you in the currency indicated
in box 4 on the Form of Election, unless you give instructions to the
contrary by indicating the currency/currencies you wish to receive in the
boxes in Sections B (iii) to B (v). An example of how Section B of a Form
of Election might be completed is given below.
________________________________________________________________________________
Section B -Complete this section if you wish to receive your
dividend in cash in a combination of the available currencies
or in a combination of cash and new shares
I/We wish to receive my/our dividend in shares and/or in cash as follows:
in shares
5 Shares
(i) please insert the number of new
shares you wish to receive
(see box 3 above for maximum) US$ 93.80
(ii) total value of new shares you
wish to receive (number of new
shares in (i) above x US$17.9844) US$ 20.06
in cash
(iii) in US$ US$ 20.07
(iv) in sterling, the equivalent of
(please insert US$ amount) US$ 20.07
(v) in HK$, the equivalent of
(please insert US$ amount) US$ 154.00
Maximum dividend available (the sum of
(ii) + (iii) + (iv) + (v))
________________________________________________________________________________
4. Payment of residual dividend entitlements
Residual dividend entitlements will be payable in cash (without interest)
if, at any time, you:
* dispose of your entire holding; or
* make an election in respect of part only of your holding; or
* receive the full cash dividend on the whole of your holding; or
* revoke your standing instructions to receive scrip dividends; or
* so request in writing to the appropriate Registrars.
5. How to participate in the Scheme
(a) If you have already given standing instructions to receive new shares
under the Scheme, you will find an Entitlement Advice enclosed with this
letter. You need take no further action unless you wish to revoke your
standing instructions or to elect to receive a smaller number of new
shares. If you do not formally revoke your standing instructions by 3
January 2007, you will receive the number of new ordinary shares shown in
box 2 on the accompanying Entitlement Advice. If you do not wish to receive
new shares, a letter revoking the standing instructions to receive scrip
dividends must be received by the appropriate Registrars at the address
given on the Entitlement Advice by close of business on 3 January 2007. A
cash dividend will then be paid on your entire holding in the currency
shown in box 5 on the Entitlement Advice. If, however, you wish to receive
new shares in respect of only part of this dividend or if you wish to
receive any dividend payable to you in cash in a currency/currencies other
than that shown in box 5 on the Entitlement Advice, please also ask the
Registrars for a Form of Election in time to return it to them by 3 January
2007. In any event, if you revoke your standing instructions you will
receive a Form of Election for any future dividends to which the Scheme
applies.
(b) If you have not previously given standing instructions to receive new
shares under the Scheme and you wish to receive new shares in lieu of a
cash dividend on this occasion only, an election to participate in the
Scheme must be made on the accompanying Form of Election. The Form is
issued to shareholders registered as at 24 November 2006 and should be read
in conjunction with this letter. If you wish to elect to receive the
maximum entitlement to new shares for this dividend, you may do so by
inserting a 'X' in the box in Section A (i) of the Form of Election. If you
wish to elect to receive a smaller number of shares than the maximum
entitlement, you should complete Section B of the Form. To be valid in
respect of the dividend payable on 18 January 2007, a Form of Election must
be completed correctly, signed and received by the Registrars at the
address given on page 2 of the Form by close of business on 3 January 2007.
(c) If you have not previously given standing instructions to receive new
shares under the Scheme and you wish to receive the maximum entitlement to
new shares automatically for this and for subsequent dividends to which the
Scheme applies, you may do so by inserting a 'X' in the box in Section A
(ii) of the accompanying Form of Election and then signing and returning
the Form to the Registrars at the address given on page 2 of the Form.
Completion of Section A (ii) of the Form will ensure that you receive
your maximum entitlement to new shares offered in lieu of the third interim
dividend for 2006 payable on 18 January 2007 and for subsequent dividends.
Your standing instructions may be revoked at any time by giving signed
notice in writing to the appropriate Registrars. However, such revocation
will take effect in respect of an offer of shares in lieu of a cash
dividend only if the notice is received on or before the final date for
receipt of Forms of Election in respect of that dividend. Your standing
instructions will lapse automatically if at any time you cease to hold any
ordinary shares.
ON THE ASSUMPTION THAT NO RESIDUAL DIVIDEND ENTITLEMENT IS BROUGHT FORWARD,
SHAREHOLDERS WITH A HOLDING AS AT 24 NOVEMBER 2006 OF FEWER THAN 126
ORDINARY SHARES WHO HAVE GIVEN STANDING INSTRUCTIONS TO RECEIVE SCRIP
DIVIDENDS, OR WHO MAKE AN ELECTION TO RECEIVE SCRIP DIVIDENDS, WILL NOT
RECEIVE ANY NEW SHARES ON THIS OCCASION AND WILL HAVE THEIR DIVIDEND
ENTITLEMENT CARRIED FORWARD IN UNITED STATES DOLLARS (WITHOUT INTEREST) AS
DESCRIBED ON PAGE 1.
6. Overseas shareholders
No person receiving a copy of this document or a Form of Election in any
jurisdiction outside the United Kingdom ('UK') or Hong Kong may treat the
same as offering a right to elect to receive new shares unless such offer
could lawfully be made to such person without the Company being required to
comply with any governmental or regulatory procedures or any similar
formalities. It is the responsibility of any person outside the UK and Hong
Kong who wishes to receive new shares under the Scheme to comply with the
laws of the relevant jurisdiction(s), including the obtaining of any
governmental or other consents and compliance with all other formalities.
It is also the responsibility of any person who receives new shares in lieu
of a cash dividend to comply with any restrictions on the resale of the
shares which may apply outside the UK and Hong Kong. For example,
shareholders in Ontario who have scrip dividend shares allotted to them
must ensure that the first trade of their scrip dividend shares is executed
on a stock exchange outside Canada.
7. Issue of share certificates and listing of new shares
Application will be made to the UK Listing Authority and to the London
Stock Exchange for the new shares to be admitted to the Official List and
to trading respectively, to the Stock Exchange of Hong Kong for listing of,
and permission to deal in, the new shares, and to the New York, Paris and
Bermuda stock exchanges for listing of the new shares.
Existing ordinary shares on the Principal Register may be held either in
certificated form, or in uncertificated form through CREST. Where a
shareholder has holdings of ordinary shares in both certificated and
uncertificated form, each holding will be treated separately for the
purpose of calculating entitlements to new shares.
Definitive share certificates for the new shares issued under the Scheme in
respect of holdings in certificated form are expected to be mailed to
shareholders entitled thereto at their risk on 18 January 2007, at the same
time as warrants in respect of the cash dividend are mailed. New shares
issued under the Scheme in respect of holdings of shares which are in
uncertificated form will also be issued in uncertificated form. The Company
will arrange for the relevant shareholders' stock accounts in CREST to be
credited with the appropriate numbers of new shares on 18 January 2007.
Dealings in the new shares in London, Hong Kong, Paris and Bermuda, and in
the American Depositary Shares in New York, are expected to begin on 18
January 2007.
8. If you have sold or transferred your shares
If you sold or transferred all or some of your ordinary shares on or before
21 November 2006 (the date on which the shares eligible for the third
interim dividend for 2006 were last quoted cum-dividend on the London, Hong
Kong and Bermuda stock exchanges), but those shares are nevertheless
included in the number shown in box 1 on the accompanying Form of Election
or Entitlement Advice, you should, without delay, consult the stockbroker
or other agent through whom the sale or transfer was effected for advice on
the action you should take.
9. General
If all shareholders were to elect to take up their entitlements to new
shares under the Scheme in respect of the third interim dividend for 2006,
92,522,759 new shares would be issued, representing an increase of 0.80 per
cent in the issued ordinary share capital of the Company as at 28 November
2006.
The total cost of the third interim dividend for 2006, ignoring any
elections for the scrip alternative, is approximately US$1,736 million. The
applicable tax credit is the sterling equivalent of approximately US$193
million.
Whether or not it is to your advantage to elect to receive new ordinary
shares in lieu of a cash dividend or to elect to receive payment in United
States dollars, sterling or Hong Kong dollars is a matter for individual
decision by each shareholder. HSBC Holdings cannot accept any
responsibility for your decision. The effect on the tax position of any
shareholder will depend on that shareholder's particular circumstances. If
you are in any doubt as to what to do, you should consult your professional
advisers. No acknowledgement of receipt of a Form of Election will be
issued.
10. Tax return
To assist shareholders who receive a scrip dividend, we will send a
Notional Tax Voucher which may be needed for tax returns. This will contain
the following particulars:
* number of ordinary shares held at close of business on 24 November 2006
* number of new ordinary shares allotted
* total dividend payable
* residual dividend entitlement (if any) brought forward from previous
dividend
* residual dividend entitlement (if any) carried forward to the next
dividend
* cash equivalent of the new shares allotted
* amount of UK income tax treated as paid on the new shares.
11. Taxation
The precise tax consequences for a shareholder receiving a cash dividend or
electing to receive new shares in lieu of a cash dividend will depend upon
the shareholder's own individual circumstances. The following is a general
outline of the tax consequences in the UK and overseas, based on current
law and practice.
No tax is currently withheld from dividends paid by the Company. Such
dividends carry a tax credit equal to one-ninth of the dividend.
(i) Cash dividends
UK resident individuals
Individual shareholders, who are resident in the UK for tax purposes,
will generally be subject to income tax on the aggregate amount of the
dividend and associated tax credit. For example, on a cash dividend of
US$90 an individual would be treated as having received dividend
income equal to the sterling equivalent of both the US$90 dividend
received and the associated tax credit of US$10 and as having paid
income tax equal to the sterling equivalent of US$10 (the associated
tax credit).
Individual shareholders who are liable to income tax at the starting
rate or basic rate only will have no further tax to pay, as the tax
liability will be fully extinguished by the associated tax credit.
Individual shareholders who are not liable to income tax are not able
to recover the tax credit.
Individual shareholders subject to income tax at the higher rate will
be liable to tax at a rate of 32.5 per cent on the aggregate of the
dividend and the associated tax credit. For example, if a higher rate
tax payer were to receive a dividend of US$90, he/she would for income
tax purposes be treated as receiving dividend income equal to the
sterling equivalent of both the US$90 dividend received and the
associated tax credit of US$10. The related tax liability would be the
sterling equivalent of US$32.50. However, the associated tax credit
equal to the sterling equivalent of US$10 would be set against the tax
liability, leaving the individual with net tax to pay of the sterling
equivalent of US$22.50.
UK resident trustees
Trustees of discretionary trusts, which are usually liable to pay
income tax at the rate of 40 per cent, may be required to account for
additional tax on UK dividend income at 32.5 per cent of the aggregate
amount of dividend received and the associated tax credit, against
which the effective 10 per cent tax credit may be offset.
UK resident companies
Corporate shareholders (other than certain insurance companies and
companies which hold shares on trading account) are not liable to
corporation tax or income tax in respect of dividends received from
the Company.
UK resident gross funds/charities
There is no entitlement, for either a gross fund or charity, to a tax
credit and consequently no claim to recover the tax credit will be
possible.
Non-UK residents
Generally, non-UK residents will not be subject to any UK taxation in
respect of UK dividend income nor will they be able to recover the
associated tax credit.
Non-UK resident shareholders may be subject to tax on UK dividend
income under any law to which that person is subject outside the UK.
Non-UK resident shareholders should consult their own tax advisers
with regard to their liability to taxation in respect of the cash
dividend.
There are special rules which apply to non-UK resident discretionary
trusts in receipt of UK dividends.
(ii) Scrip dividends
UK resident individuals
The tax consequences of electing to receive new shares in lieu of a
dividend are similar to those of receiving cash dividends.
Individual shareholders who elect to receive new shares in lieu of a
cash dividend will be treated as having received income of an amount
which, when reduced by income tax at the starting rate (currently 10
per cent) is equal to the 'cash equivalent' which would have been
received had they not elected to receive new shares. For example if a
shareholder elected to receive new shares in lieu of a US$90 cash
dividend, they would for UK tax purposes be treated as receiving
income of US$100 and as having paid tax equivalent to US$10.
Individual shareholders who are liable to income tax at the starting
rate or basic rate only will have no further tax to pay. Individual
shareholders liable to tax at the higher rate will be liable to pay
additional tax at the rate of 22.5 per cent of the aggregate of the
cash equivalent and associated tax credit (which equates to the
sterling equivalent of US$22.50 in the example above).
For income tax purposes, HM Revenue & Customs will substitute the
market value of the shares on the first day they are dealt in on the
London Stock Exchange for the 'cash equivalent' if the difference
between the cash dividend and the market value equals or exceeds 15
per cent of the market value.
For capital gains tax purposes the new shares will be treated as a
separate holding. The base cost of these shares will equal the 'cash
equivalent' or, if substantially different, the market value on the
first day of dealing.
UK resident trustees
Trustees of discretionary trusts liable to account for income tax on
the income of the trust will be treated as having received gross
income equal to the 'cash equivalent' as described above. Any tax
liability will be calculated in line with the cash dividend treatment
described above (tax at a rate of 32.5 per cent being partially offset
by the effective 10 per cent tax credit).
UK resident companies
Corporate shareholders will not be liable to corporation tax on the
receipt of new shares. For capital gains tax purposes the base cost of
these shares will be nil.
UK resident gross funds/charities
There is no entitlement, for either a gross fund or charity, to a tax
credit and consequently no claim to recover the tax credit will be
possible.
Non-UK residents
Individual shareholders will be treated for UK tax purposes as having
received income of an amount which, when reduced by income tax at the
starting rate (currently 10 per cent) is equal to the 'cash
equivalent' which would have been received had they not elected to
receive new shares. No UK tax assessment will be made on such
individuals, but the tax credit cannot be recovered.
However, a non-UK resident shareholder may be subject to tax on the
new shares received under any law to which that person is subject
outside the UK. Non-UK resident shareholders should consult their own
tax advisers with regard to their liability to taxation in respect of
the new shares.
Residual dividend entitlement
Under current legislation, a UK resident shareholder will not be
subject to UK tax on any amount carried forward as a residual dividend
entitlement until either a new share or cash is received. The tax
treatment of the new ordinary share will be the same as that of any
other new ordinary share issued at the same time as a scrip dividend.
Any payment in cash will be taxed as a cash dividend.
Timetable of events
________________________________________________________________________________
American Depositary Shares quoted ex-dividend in New York 21 November 2006
Shares quoted ex-dividend in London, Hong Kong and Bermuda 22 November 2006
Record date for the first interim dividend for 2005 24 November 2006
Shares quoted ex-dividend in Paris 27 November 2006
FINAL DATE FOR RECEIPT BY REGISTRARS OF FORMS OF ELECTION
AND REVOCATIONS OF STANDING INSTRUCTIONS FOR SCRIP DIVIDENDS 3 January 2007
Exchange rate determined for payment of dividends in sterling
and Hong Kong dollars 8 January 2007
Payment date - dividend warrants mailed; new share
certificates or Bermuda Overseas
Branch Register Transaction Advices and Notional
Tax Vouchers mailed; shares credited to stock
accounts in CREST 18 January 2006
Expected first day of dealings in new shares in London,
Hong Kong, Paris and Bermuda; and in American Depositary
Shares in New York 18 January 2007
________________________________________________________________________________
Further copies of this letter, replacement Forms of Election and a Chinese
translation of this and future documents may be obtained from the Registrars
Principal Register Hong Kong Overseas Branch Register
Computershare Investor Services PLC Computershare Hong Kong Investor Services Limited
PO Box 1064 Hopewell Centre, 46th Floor
The Pavilions 183 Queen's Road East
Bridgwater Road Wan Chai
Bristol Hong Kong SAR
BS99 3FA
United Kingdom
Telephone: (44) 0870 702 0137 (calls cost from 8p/min) Telephone: 2862 8555
Email: web.queries@computershare.co.uk Email: hkinfo@computershare.com.hk
Bermuda Overseas Branch Register US Shareholder helpline
Corporate Shareholder Services Telephone: 1 866 299 4242
The Bank of Bermuda Limited
6 Front Street
Hamilton HM 11
Telephone: 299 6737
Within this document the Hong Kong Special Administrative Region of the
People's Republic of China has been referred to as 'Hong Kong'.
The Directors of HSBC Holdings plc are S K Green, Baroness Dunn*, Sir Brian
Moffat+, M F Geoghegan, Lord Butler+, R K F Ch'ien+, J D Coombe+, R A Fairhead+,
D J Flint, W K L Fung+, S Hintze+, J W J Hughes-Hallett+, Sir Mark
Moody-Stuart+, G Morgan+, S W Newton+, S M Robertson+, H Sohmen* and Sir Brian
Williamson+.
* Non-executive Director
+ Independent non-executive Director
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 05 December 2006