The Securities and Exchange Commission of Pakistan (SECP) has recommended a revamp of the Companies (Further Issue of Shares) Regulations 2020 in order to improve and ensure transparency in the capital formation process.
A concept paper has been posted on SECP’s website for public comment, suggesting new modes and mechanics for companies to raise capital.
In accordance with international best practises, the concept paper proposes that listed companies adopt an enhanced disclosure-based regime for the issuance of right shares.
The emphasis in this regime is on giving sufficient information to investors so that they may make educated decisions while also strengthening investor protection.
The suggested disclosure-based routine would comprise preparing enhanced disclosure offering papers, soliciting public opinions from the apex and front-line regulators, and publishing the final offering document after incorporating the same, culminating to the completion of the right issue.
A disclosure-based approach is currently regarded crucial to any capital raising activity by listed businesses in numerous countries, including Malaysia, Thailand, Singapore, and India.
Employee Stock Option Schemes and other non-rights issuing of shares by publicly traded businesses are also discussed in the study (ESOS).
To read our blog on “SECP allows listed companies to conduct E-voting on important decisions”,” click here
