SECP proposes slashing bonus and rights share issuance timelines
Draft amendments aim to cut issuance time by over 70%, improve capital mobilization, and streamline regulatory processes for listed companies
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The Securities and Exchange Commission of Pakistan (SECP) has proposed sweeping amendments to the Companies (Further Issue of Shares) Regulations, 2020, aimed at drastically reducing the time required to issue bonus and rights shares, thereby enhancing market efficiency and enabling quicker capital mobilization.
According to a notification issued by the SECP, the proposed changes would reduce the issuance timeline for bonus shares from the current 85 days to just 11 days, an 87% reduction. Similarly, the timeline for issuing rights shares would be trimmed from 181 days to 50 days, representing a 72% decrease.
The reforms follow extensive stakeholder engagement and consultations with key market players, including the Pakistan Stock Exchange (PSX), Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL), top consultants, legal experts, and financial professionals.
To ensure transparency and inclusivity, the SECP first gathered preliminary feedback to identify areas needing improvement. This input was compiled into a detailed consultation paper titled “Reduction in Timelines for Issuance of Bonus and Right Shares by Listed Companies.” The paper was made publicly available to solicit further comments.
In addition to the consultation paper, SECP hosted both in-person meetings and an online session with stakeholders to deliberate on the proposed changes. The final draft amendments reflect a consensus-driven approach to regulatory reform.
The proposed amendments have now been formally notified for public comment before final implementation.
Among other notable changes, the SECP also proposed eliminating the requirement for listed companies to prepare offer documents in Urdu and introduced a new requirement for submitting additional information along with the right offer documents to ensure smoother processing.
The SECP said these reforms are intended to modernize the regulatory environment for listed companies and support faster and more efficient capital market transactions.
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