ISLAMABAD: The Securi­ties and Exchange Commission of Pakistan (SECP) has allowed companies to withhold all future dividends of shareholders who have not provided their CNIC numbers to be written on the dividend warrants.

However, the companies will require the SECP’s approval to withhold dividend of any shareholder, a notification issued on Tuesday said.

The SECP introduced a policy of mandatory bearing of CNIC numbers on the dividend warrants of shareholders in 2001, with an aim to minimise the risk of money laundering, terrorism financing and benami transactions.

Following the introduction of aforesaid requirement, extensive efforts were made by companies to procure copies of CNICs of their shareholders and substantial compliance has been made. Still there were some who have not provided their CNICs to the firms.

Therefore, the companies have been allowed to withhold all future dividends of such shareholders.

Such companies have been advised to provide public notice for at least three dividend declarations to the shareholders before approaching to the SECP. Nevertheless, such firms will be required to issue dividend warrants to shareholders within five days of receipt of CNIC copy.

The companies will also ensure that list of such shareholders will be prominently displayed on companies’ website.

The SECP believes that this is to safeguard the interests of shareholders, and make the dividend declaration less cumbersome.

Published in Dawn, April 6th, 2016