A scrip dividend is a mandatory event with a choice: take cash, or take new shares instead. The formula is mechanical: new shares = (shares × cash dividend) / reference price. The issuer keeps the cash it would otherwise have paid, no stamp or SDRT is due on the new line, and the company can cancel the scrip if the market price swings against the reference by about 15%.
A DRIP is different. The agent takes the cash dividend and buys existing shares in the market. New shares are not created, the buyer pays stamp or SDRT plus commission, and there is no price certainty because the purchase prints at the then market.
Dividend access plans sit in a third bucket. In a dual-headed group, the holder elects whether a UK-resident or a non-resident company is the payer. That is a tax-treatment election about source, not a promise of a particular credit.
Atlantic Horizon UCITS ICAV meets all three on a single UK name. Thames Industrial plc offers 8p cash or scrip at a 240p reference. State Street will default the CREST position to cash unless Dublin sends an election. Nippon Industrials KK does not run a UK-style scrip; Tokyo pays cash through Zengin. Treating the Japanese line as if it had a stock alternative is how a desk waits for an MT565 that will never come.
The Irish prospectus says who may elect. On the ICAV that is usually the manager, not each unitholder. The Dublin administrator still has to post the form that actually arrives — cash income or a new stock line — before NAV is released. It cannot outsource that posting, and it cannot outsource the ICAV’s own shareholder register, even when the election itself travelled through State Street.
The Cayman sleeve of the same house can elect differently on the same Thames Industrial scrip. That is allowed. What is not allowed is assuming the two books made the same choice, or assuming a DRIP enrolment on Cayman automatically enrols the UCITS. Scrip prints stock; a DRIP buys stock; an access plan picks a payer. Three workflows, three defaults, one custodian.
Scrip programmes almost always default to cash. A DRIP defaults to cash as well unless the holder is already in the plan. Missing the election is how a desk “takes cash” without meaning to, then wonders why the CREST position did not rise on pay date.