BSEC bars dividend proposals without full cash deposits

The Bangladesh Securities and Exchange Commission (BSEC) decided to tighten rules on cash dividend distribution by listed companies following instances of non-compliance with existing directives.
Under the decision, listed companies must deposit the full amount of declared cash dividends into a separate bank account and obtain a certificate from the bank before placing any dividend proposal at their annual general meetings (AGMs).
The securities regulator also decided to take punitive action against companies and individuals responsible for violating dividend distribution rules.
The decisions were made at a commission meeting on Tuesday, chaired by BSEC Chairman Masud Khan.
According to the BSEC, existing directives require listed companies to transfer the full amount of annual or final cash dividends declared by their boards into a separate bank account at least one day before the AGM.
Companies must also obtain a certificate from the bank confirming the deposit. 
The certificate must be authenticated by the managing director, chief financial officer and company secretary before being presented at the AGM and submitted to the relevant stock exchanges.
However, the commission has recently identified several cases in which listed companies failed to comply with these requirements.
To prevent further irregularities, the BSEC decided to amend the existing directives, making it mandatory for companies to deposit the full dividend amount and obtain the required bank certificate before placing dividend proposals at AGMs.
The regulator also decided to take punitive measures against those responsible for non-compliance under applicable securities laws and regulations.
Meanwhile, the BSEC decided to simplify the appointment and reappointment process for independent directors at listed companies to reduce administrative delays.
The move aims to streamline procedures under the Corporate Governance Code, 2018, and its subsequent amendments.
Under the decision, approval for the reappointment of existing independent directors will be granted after Bangladesh Bank provides an updated Clean Credit Information Bureau (CIB) report.
The commission also decided that independent directors who have previously received waivers or relaxations concerning qualification and experience requirements under the Corporate Governance Code will not need to seek fresh approval on the same grounds.
Such waivers will remain valid when the directors are appointed to another listed company or reappointed to the same company.
The BSEC said the changes would reduce administrative complexities and speed up the appointment and reappointment of independent directors.