What is the difference between a stock dividend and a bonus issue?

Both give free shares in proportion to the holding. A stock dividend (DVSE) is a dividend paid in shares; a bonus issue (BONU) capitalises reserves. The difference often matters most for tax.

Do I need to instruct on a DVSE event?

Normally no: it is mandatory and the shares are credited automatically. Only when the event is announced as CHOS, with options such as selling rights, is an instruction needed.

What happens to fractional shares?

They are handled as the issuer states: usually rounded down, with the fraction paid in cash or lost. The disposition of fractions indicator in the MT564 tells you which.

Corporate action events

DVSE: Stock Dividend

Written and maintained by ZagTrader. Last reviewed 21 October 2026. How this page is sourced and checked

DVSE is a stock dividend: the company pays its dividend in its own shares rather than in cash. Holders on the record date receive new shares in proportion to their holding.

Code: DVSE
Usually announced as: MAND (CHOS also allowed)

What DVSE means

A company that wants to reward shareholders without paying out cash can distribute additional shares as a dividend. For example, a 5% stock dividend gives 5 new shares for every 100 held. The holder’s percentage of the company does not change and the share price adjusts on the ex date.

Whole shares are credited and fractions are usually rounded down and paid in cash or dropped, according to the issuer’s terms. Many tax systems treat a stock dividend as income at the value of the shares received, unlike a bonus issue out of reserves, but this varies by country.

When you see it

Normally an MT564 with :22F::CAEV//DVSE and :22F::CAMV//MAND, a SECU option with the ratio (:92D::ADEX), how fractions are handled (:22F::DISF), the ex date, record date and payment date. The SMPG grid also allows CHOS, for example where tradable rights were distributed first and holders can also sell or buy rights.
DVSE vs BONU: both deliver free shares; the issuer and local practice decide whether it is a dividend (DVSE) or a capitalisation of reserves (BONU), and the tax result can differ. DVSE vs DVOP: DVOP lets the holder choose cash instead. DVSE vs SPLF: a split changes the nominal value of the existing shares.

What to do next

No instruction for a mandatory stock dividend. Check the record date position and expected quantity.
When the MT566 arrives, reconcile the shares credited and any cash for fractions. Record the income value if the client’s tax system treats it as a dividend, and set the book cost of the new shares accordingly.

Where it appears in MT and ISO 20022

MT (ISO 15022)

MT564 sequence A (GENL): :22F::CAEV//DVSE, with :22F::CAMV//MAND (or CHOS).
MT566 and MT568 sequence A: :22F::CAEV//DVSE; MT565 and MT567 for the CHOS case.

MX (ISO 20022)

seev.031 CorpActnGnlInf/EvtTp/Cd = DVSE, with CorpActnGnlInf/MndtryVlntryEvtTp/Cd = MAND or CHOS.
The same event type element is used in seev.036 (movement confirmation).

Questions

What is the difference between a stock dividend and a bonus issue?: Both give free shares in proportion to the holding. A stock dividend (DVSE) is a dividend paid in shares; a bonus issue (BONU) capitalises reserves. The difference often matters most for tax.
Do I need to instruct on a DVSE event?: Normally no: it is mandatory and the shares are credited automatically. Only when the event is announced as CHOS, with options such as selling rights, is an instruction needed.
What happens to fractional shares?: They are handled as the issuer states: usually rounded down, with the fraction paid in cash or lost. The disposition of fractions indicator in the MT564 tells you which.