Taking another step towards facilitating minority shareholders, the Securities and Exchange Commission of Pakistan (SECP) has proposed reducing turnaround time for payment of cash dividends to shareholders of listed companies from the existing 15 days to 3 working days only.
The SECP has issued draft amendments to Companies (Distribution of Dividends) Regulations, 2017 to solicit public comments.
SECP believes that the proposed period of three working days is sufficient for the transfer of cash dividends from a company’s bank account to the bank accounts of their respective shareholders.
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 dividends 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.