Bank of Montreal has announced changes to its Shareholder Dividend Reinvestment and Share Purchase Plan.

Under the plan, shareholders may elect to have dividends on common shares reinvested in additional common shares of the bank.

BMO said Tuesday that it has decided to issue shares from treasury at a 2% discount from the average market price (as defined in the plan) until such time as the bank elects otherwise. Previously, the common shares purchased under the plan had been issued from treasury with no discount to the average market rice.

This change will be effective for the first quarter of fiscal 2009 dividend previously announced on Nov. 25, 2008. The common share dividend is payable on Feb. 26, 2009 to shareholders of record on Feb. 6, 2009.

The discount will not apply to shares purchased under the “Optional Cash Payment” feature of the plan.

Existing members of the plan will automatically have the discount applied to the reinvestment of the Feb. 26 dividend payment unless they choose to discontinue participation in the plan, the bank said.