Yes, in theory I would be responsible for delivering the dividend through my broker to the party that leant the stock to be shorted. As the dividend consists of restricted shares, I would have to provide restricted shares. And where am I supposed to get these restricted shares? Think about it, and you will understand why FINRA is taking their time deciding what to do with this ludicrous way MDBX is proposing to issue a dividend.
Note that the recent MWAR proposed restricted share dividend went through as a free-trading share dividend. This was a few months after the GRLT restricted share dividend was approved, and perhaps the resulting confusion at brokerages about covering short positions caused FINRA to address this issue.
In any case, notice of the dividend issue will be posted on the OTC Daily List before the dividend is issued and I will have, I believe, one trading day to take action to cover my position, or box (go long equal number of shares in another account) in which case I will be the proud owner of sufficient restricted shares to cover my position including the dividend.
I am waiting to hear what FINRA has to say about all this.
