All listed companies: SECP decides to grant general relaxation

The Securities and Exchange Commission of Pakistan (SECP) has decided to grant a general relaxation to all listed companies from the requirement of payment of cash dividend through electronic mode directly into the bank accounts of the shareholders up to March 31, 2017.
According to the circular 38 issued by the SECP here on Friday, the provisions of Section 242 of the Companies Ordinance, 2016 (the "Ordinance") provides that any dividend declared by a company must be paid to its registered shareholders or to their order within such period and in such manner as may be specified. Proviso to Section 242 of the Ordinance provides that any dividend payable in cash may be paid by a cheque or a warrant or in any electronic mode to the shareholders entitled to the payment of the dividend, as per their direction.
Second Proviso to Section 242 of the Ordinance provides that in case of a listed company, any dividend payable in cash shall only be paid through electronic mode directly into the bank account designated by the entitled shareholders. The SECP said that a number of listed companies have approached the Securities and Exchange Commission of Pakistan (the "Commission"), saying that they are facing difficulty in compliance with the aforementioned requirement as a number of shareholders have not provided bank account details or the bank account details earlier provided by the shareholders are an old pattern which does not enable electronic credit.
Accordingly, the Commission has decided to grant a general relaxation to all listed companies from the requirement of payment of cash dividend through electronic mode directly into the bank accounts of the shareholders up to March 31, 2017. The listed companies shall continue to pay cash dividend to its shareholders as per previous arrangements till such time, the SECP said.
Keeping in view the mandatory requirements of the provisions of section 242 of the Ordinance, all listed companies are advised to approach their shareholders for obtaining electronic dividend mandate and update their bank account records as all dividend payments after March 31, 2017 shall be paid through electronic mode only, the SECP added.