SECP Allows Companies to Pay Cash Dividends to NRVA Holders - Android

The Securities and Exchange Commission of Pakistan (SECP) has decided to allow companies to make payment of cash dividend to… Read More

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The Securities and Exchange Commission of Pakistan (SECP) has decided to allow companies to make payment of cash dividend to shareholders, who are Non-Resident Pakistanis having NRP Rupee Value Account (NRVA).

The SECP has notified S. R. O. 1113(I)/2020 to issue draft amendment to the Companies (Distribution of Dividends) Regulations, 2017 (the Regulations) here on Monday.

These are draft amendments to revise the procedure of payment of cash dividends and would be finalized after seeking stakeholders’ comments within 14 days of the issuance of these amendments.

Under the new amendment, in case shares of a company, whether listed or not, are held by a non-resident shareholder having no designated bank account or Non-Resident Pakistanis having NRP Rupee Value Account (NRVA), the company may make payment of cash dividend to such shareholder in a manner and within such time period as may be allowed by the State Bank of Pakistan (SBP).

Previously, the regulations said that in case shares of a company, whether listed or not, are held by a non-resident shareholder having no designated bank account, the company may make payment of cash dividend to such shareholder after needing specific approvals from the SBP and do so within the given time frame as well.

In August 2020, in order to facilitate Non-Resident Pakistanis (NRPs) with opening and operating of non-resident Pakistani rupee accounts, the State Bank of Pakistan (SBP) has introduced NRP Rupee Value Account (NRVA). The NRVA will enable NRPs, through digital means to invest in the stock exchanges in Pakistan, residential and commercial real estate, Government of Pakistan (GoP) debt securities and term/remunerative deposit products of Authorized Dealers (ADs) on repatriable basis.

Other than NRPs, foreign nationals except those who have obtained work visa/permit to work in Pakistan, and firms or companies that are incorporated or registered outside Pakistan will be able to make use of the NRVAs.

1. R. O. 1113(I)/2020 says, “The following draft amendment to the Companies (Distribution of Dividends) Regulations, 2017 (the Regulations), proposed to be made by the Securities and Exchange Commission of Pakistan, in exercise of the powers conferred by sub-section (1) of section 512 read with section 242 and 243 of the Companies Act, 2017 (XIX of 2017) is hereby published, as a requirement of proviso to sub-section (1) of the said section 512, for information of all the persons likely to be affected thereby and notice is hereby given that comments, if any, received within fourteen days of the date of this notification will be taken into consideration, namely:- DRAFT AMENDMENT In the aforesaid Regulations, in regulation 4, sub-regulation (12), after the words “non-resident shareholder having no designated bank account” the following words shall be inserted “or Non-Resident Pakistanis having NRP Rupee Value Account (NRVA)”.

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