ISLAMABAD: The Companies (Further Issue of Shares) Regulations 2020 have been amended by the Securities and Exchange Commission of Pakistan (SECP) to streamline the right issuance process. The amendments include a single set of standard disclosure and reporting requirements that apply to all right issues, regardless of issue size.
Regardless of the size of the right issue, the issuers will now need to request feedback on the draft offer document from the SECP and the Pakistan Stock Exchange (PSX) under the new modifications.
Disclosures in the right issue offer document have been reinforced to give investors access to critical information about the issuer, issuer-specific risk factors, and the effects of these risks on the business’s operations and performance, empowering them to make well-informed decisions.
It is no longer necessary for directors and significant shareholders to bind themselves to subscribe to the correct issue or to make arrangements for the subscription of their allotted shares.
In the past, this need applied to all directors and significant shareholders, even those who disagreed with the choice to move forward with the appropriate subject.
Subsequent shareholders and dissident directors are no longer need to submit an undertaking, and their part of the right entitlement can be underwritten with the share issued to the public.
At the time of requesting approval under section 83(1)(b) of the Companies Act, 2017, it was not practically possible for applicants to assure compliance with certain conditions in the case of additional issuance of shares by way of other than right offer, where the issuing of shares is reliant upon a future event. To address this problem, some exclusions have been added to streamline the share issuance procedure.
