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ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced amendments to the Companies (Further Issue of Shares) Regulations 2020, simplifying the right issuance process with single, standardised disclosure and reporting requirements applicable for all right issues regardless of the issue size.
Under the new amendments, the issuers will have to solicit comments from both the Pakistan Stock Exchange (PSX) and the SECP on the draft offer document, irrespective of the size of the right issue.
To enable investors to make informed decisions, disclosures in the right issue offer document have been strengthened so investors get access to vital information regarding the issuer, risk factors specific to the issue or the issuer, and the impact of such risks on the operations and performance of the company.
The requirement for directors and substantial shareholders to mandatorily undertake that they shall subscribe to the right issue or arrange for subscription of their entitled shares has been streamlined.
This requirement was previously applicable for all directors/substantial shareholders including the directors/substantial shareholders who do not agree to the decision to proceed with the right issue.
Now the dissenting directors/substantial shareholders need not submit an undertaking and their portion of the right entitlement can be underwritten along with the portion offered to the general public.
In further issue of shares by way of other than right offer, where issuance of shares is contingent upon a future event, it was not practically possible for applicants to ensure compliance with certain requirements at the time of seeking approval under section 83(1)(b) of the Companies Act, 2017. In order to resolve this issue, specific exceptions have been introduced to facilitate the share issuance process.