Staff Reporter

ISLAMABAD: The Securities & Exchange Commission of Pakistan (SECP) has revamped the Companies (Further Issue of Shares) Regulations, 2020 (Regulations) for listed companies through introducing amendments vide notification dated September 21, 2022.

Examination of the historical cases of right issues by listed companies indicated that risk disclosures were minimal and provided limited information to the investors even in cases of large issues. Therefore, after studying practices in several jurisdictions, analysing global trends and thorough deliberations with the industry participants, SECP has introduced certain amendments in the capital issue regime to bring it in line with global practices.

The major amendment is adoption of a disclosure-based regime that envisages preparation of offering documents containing enhanced disclosures, seeking public comments (optional), comments of the Apex and Front-line regulators and publishing final offering documents after incorporating the comments.

Other amendments include provision of Exit Opportunity to the shareholders, imposition of lock-in clause on the sponsors, reporting of proceeds utilization by the statutory auditors, optional concept of Minimum Level of Subscription (MLS) and ‘Applications Supported by Blocked Amounts’ (ASBA) and placing restrictions on underwriters that fail to meet their obligations.