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ISLAMABAD: Taking another step forward towards facilitating minority shareholders, the Securities and Exchange Commission of Pakistan (SECP) has proposed reducing turnaround time for payment of cash dividend to the shareholders of the listed companies from the existing 15 days to three working days only.

The SECP has issued draft amendments to the Companies (Distribution of Dividends) Regulations, 2017, to solicit public comments.

The SECP believes that the proposed time period of three working days is sufficient for transfer of cash dividend from a company’s bank account to the accounts of their respective shareholders.

The section 242 of the Companies Act, 2017, requires every listed company to pay cash dividend only through electronic mode directly into the designated bank accounts of a shareholder.

Since, transfer of cash dividend through IBANs is safe, cost effective, and efficient, all shareholders are required to provide their IBANs to their respective companies, for making payment of cash dividends.

According to the draft amendments in the Companies (Distribution of Dividends) Regulations, 2017, the chief executive officer of every company is responsible to make the payment of cash dividend, within a period of three working days from the date of its approval by the shareholders in general meeting, in case of final dividend; and board, in case of interim dividend, it added.

The draft amendments are available on the SECP website.

Interested individuals/ stakeholders can furnish comments on email id ‘[email protected]’; and ‘rohail.ahmed @secp.gov.pk’ by March 8th, 2021.

Copyright Business Recorder, 2021