The Securities and Exchange Commission of Pakistan (SECP), in a bid to improve and ensure transparency in the process of capital formation, has recommended a revamp of Companies (Further Issue of Shares) Regulations, 2020.
A concept paper, suggesting new modes and mechanics through which companies can raise capital, has been placed on SECP’s website for public comments, said a press release issued here.
The concept paper, per international best practices, has proposed to adopt an enhanced disclosure-based regime for the issuance of right shares by the listed companies.
In this regime, the focus is increased to providing sufficient information to investors, enabling them to make informed decisions and increase investor protection.
The proposed disclosure-based regiment will include, the preparation of the offering document with enhanced disclosures; seeking public comments of the apex and front-line regulator and publishing the final offering document after incorporating the same, leading to the completion of the right issue.
In many countries like Malaysia, Thailand, Singapore and India, a disclosure-based regime is now considered at the core of any capital raising activity by listed companies.
The paper also includes a few considerations concerning the issuance of shares by listed companies by way of other than right including Employee Stock Option Schemes (ESOS).
