The Securities and Exchange Commission of Pakistan (SECP) has proposed certain amendments in the Public Offering Regulations 2017 and has uploaded them on their website for public opinion. According to SECP officials, the main purpose for the proposed amendments is to facilitate the capital formation of newly listed companies, reducing costs related to IPOs and safeguarding the rights general public in such investments.
According to the proposed amendments, the SECP has reviewed the eligibility criteria for listing of the new companies. According to the proposed criteria, companies who present a viable business plan would be allowed to raise capital through the equities market. Furthermore, the companies would also have to submit a risk assessment report in their offering documents. This step has been proposed to safeguard the investors and to inform them regarding the risks related to their investments. Moreover, to reduce the cost of IPO the proposed regulations have allowed the business entity to take on both the roles of Consultant to the issue, and the Book Runner.
The SECP has also proposed certain parameters for Green Field Projects (GFPs). According to the proposed regulations, the sponsors of the GFPs are required to have successful business record of running listed companies. The issuer shall also have to make risk related disclosures in the offering document and would have to offer shares only through the fixed price method.
The proposed amendments are on the SECP website and the General Public/Stakeholders can comment on the proposed policies, latest by Oct 24, 2019.