SECP overhauls IPO book building system at Pakistan Stock Exchange
New joint procedures by PSX and NCCPL replace the traditional book runner model, widening participation and modernizing how share prices are set in Pakistan’s stock market
Business Desk
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The Securities and Exchange Commission of Pakistan (SECP) has approved new joint procedures for a revised Book Building Mechanism, marking a major step toward modernizing how companies raise money through the stock market.
The new system finalizes recent changes to the Public Offering Regulations, 2017, and sets clear rules for how initial public offerings (IPOs) will be priced and managed in Pakistan.
According to the SECP, this updated process aims to make the market more transparent, ensure fairer price discovery for new shares, and boost investor confidence. Officials said the move is part of the regulator’s broader effort to strengthen the country’s capital market and attract more investors.
What’s changing
Under the new system, the Pakistan Stock Exchange (PSX) and the National Clearing Company of Pakistan Limited (NCCPL) have worked together to upgrade the book building process—the method used to determine share prices in an IPO based on investor demand.
The traditional Book Runner model, where one investment bank handled bids, is being replaced by a new concept called Eligible Participants (EPs).
Now, a wider group, including securities brokers, banks, development finance institutions (DFIs), and mutual funds, can take part directly in the bidding process. These participants can place bids either for themselves or on behalf of their clients.
The upgraded system allows investors to choose whether to make their bids public or confidential, giving them more flexibility.
Securities brokers will have an easier way to register clients, while banks and DFIs serving as consultants for IPOs can also help investors join the process.
By expanding who can participate, the SECP expects the new mechanism to make IPOs more competitive, efficient, and accessible.
The book building platform connects the PSX system with NCCPL’s clearing and settlement functions, ensuring smooth handling of investor payments and refunds.
Officials said the reform represents a “major milestone” in making Pakistan’s capital market more modern, transparent, and investor-friendly.
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