LAHORE: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday agreed to review the proposed amendment to the Companies (Distribution of Dividends) Regulations 2017, which requires cash dividend payment in three working days from the date of its approval by the general meeting of the company’s shareholders in case of final dividend and its board in case of interim dividend.

The assurance was given by SECP chairman Aamir Khan during a virtual meeting with foreign investors operating in the country and represented by the Overseas Investors Chamber of Commerce and Industry (OICCI). The SECP agreed to scale down the period for dividend payment (to the investors and shareholders) from 15 working days to three working days over the next two years. The OICCI members had explained to the SECP chief the difficulties like determination of the rightfully entitled investors and shareholders, tax matters, documentation requirements in case of foreign shareholding, etc in the way of sudden transition.

In the UK and India, the companies have 15 days for dividend payment. The interim dividend could not be paid without seven-day book closure, which is generally a month after board announcement. In case of foreign shareholders at times one has to get reduced rate certificates from tax commissioners who have 30-day statutory periods to reply on applications.

The SECP has proposed the changes in regulations to improve the regulatory ecosystem.

Published in Dawn, March 4th, 2021