The Securities and Exchange Commission of Pakistan (SECP) has unveiled a comprehensive set of proposed amendments to the Companies (Further Issue of Shares) Regulations, 2020. These reforms are aimed at dramatically improving the speed and transparency of corporate processes surrounding right and bonus share issuances, under the authority granted to SECP by the Companies Act, 2017. The draft amendments have been published on SECP’s website, inviting public feedback within 14 days before moving toward formal implementation.
Among the most notable shifts in the proposed framework is the aggressive reduction in timelines for several key stages of right share issuance. Under the new rules, companies would be obligated to submit their draft offer documents to SECP on the very same day their boards approve the right share issuance, a significant tightening from the earlier 45-day allowance. In return, SECP has committed to a much swifter review process, pledging to respond within just five working days, down from the existing 15-day timeline.
Companies themselves would also face sharper response times, required to address SECP’s observations within five days — a notable cut from the current 20-day window. Similarly, book closure for determining right share entitlements must commence within seven working days of the offer document’s placement on the Pakistan Stock Exchange (PSX) website, with the closure limited strictly to a single day.
Parallel changes are proposed for bonus share processes. Companies would be required to initiate book closure for bonus share entitlements within seven working days of their board’s resolution, once again with only a single day of closure permitted. This is expected to ensure quicker shareholder benefit realization and keep market timelines aligned.
In a move to increase disclosure and protect investors, the draft amendments expand the information companies must provide. These include a mandatory explanation for issuing different classes or kinds of shares, along with complete details of associated companies such as CUINs and the CNICs, father names, and shareholding data of sponsors, promoters, directors, and substantial shareholders. Meanwhile, companies will be relieved from the previous requirement to submit offer documents in both English and Urdu, simplifying compliance.
The proposed regulations also emphasize immediate transparency. Corporate boards will now be required to communicate decisions on share issuances to SECP and the stock exchange on the same day they are made, ensuring timely public dissemination. In line with stricter procedural controls, companies must also submit original challans or proofs of regulatory fee payments at the time of application.
Further technical refinements include adjustments in processing timelines across several schedules. For instance, some processing periods will drop from 14 business days to 10 working days, while Schedule I will now explicitly require companies to justify the issuance of different share classes.
By inviting industry stakeholders to provide feedback within a short 14-day window, SECP aims to move swiftly toward finalizing these critical updates. The overarching goal is clear: to foster a more efficient, transparent, and investor-friendly corporate environment in Pakistan’s evolving capital market. This initiative not only aligns with global best practices but also signals SECP’s intent to streamline regulatory processes, enabling faster capital formation and stronger corporate governance across the board.