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BSEC now clarifies cash bonus issue

FE Report | Published: October 03, 2019 10:25:53 | Updated: October 04, 2019 10:39:37


The securities regulator has clarified its earlier notification regarding the recommendation and distribution of cash dividend.

Being compliant with securities rules, listed companies will be able to recommend and distribute cash dividend from the earnings retained in the year of declaring dividend despite having accumulated losses.

The Bangladesh Securities and Exchange Commission (BSEC) said this on Wednesday in a clarification of its previous notification regarding cash dividend.

"BSEC has issued this clarification in the interest of the capital market after reviewing the application of investors and listed companies," said a statement.

Earlier on May 23, the securities watchdog issued a notification regarding the declaration of bonus shares.

According to the notification, no listed company shall declare bonus shares without justified reasons, including BMRE (balancing, modernising, rehabilitation and expansion) or any of its components.

In case of declaring bonus shares, the companies will be required to disclose price sensitive information (PSI) mentioning the reason of bonus declaration.

PSI will include that the bonus share is declared out of an accumulated profit or a share premium.

It is mandated that bonus share is not declared from capital reserve or revaluation reserve, or any unrealised gain or out of profit earned prior incorporation of the company or through reducing capital or doing anything so that the post-dividend retained earnings become negative or a debit balance.

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