ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday revamped the Companies (Further Issue of Shares) Regulations 2020 for listed companies allowing the investors to make informed decisions and implement them at a faster pace.

The SECP has said that the examination of the historical cases of right issues by listed companies indicated that risk disclosures were minimal and provided limited information to investors even in cases of large issues.

“These amendments have been introduced after studying practices in several jurisdictions, analysing global trends and thorough deliberations with the industry participants,” an SECP spokesperson said.

The amendments in the capital issue regime are expected to bring the local market in line with global practices, he added.

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

Other amendments include the provision of ‘Exit Opportunity’ to the shareholders, imposition of lock-in clause on the sponsors, reporting of proceeds utilisation by the statutory auditors, the 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.

For other than the right issues, minimum contents of valuation reports and procedural requirements to be complied with by the companies have been specified.

Published in Dawn, September 22nd, 2022