ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) in coordination with the Pakistan Stock Exchange (PSX) has introduced the PSX e-IPO system for Initial Public Offering (IPO) investors including individual investors, corporate investors, and Roshan Digital Account holders.
According to a SECP document on IPOs for new investors issued on Thursday, the SECP as an apex regulator of the capital market has adopted a disclosure-based regime for processing IPO applications. During the fiscal year 2021, the SECP has processed 10 IPO applications based on a disclosure-based regime and has recommended certain value-added disclosures in the prospectus.
Based on the research conducted, the SECP is of the view that the IPO process, listing and other related requirements in Pakistan are most conducive as compared to other comparable jurisdictions such as Hong Kong, Malaysia, and India.
Regulatory amendment(s) has led to an increase in the number of listings. During the fiscal year 2021, 10 companies have tapped IPO market as compared to one company during the corresponding period, the SECP said.
To increase the outreach of an IPO, the public offering process for the subscription of securities has been automated. For this purpose, the SECP in coordination with the PSX has introduced the PSX e-IPO system through which IPO investors including individual investors, corporate investors, and Roshan digital account holders can submit IPO application and pay subscription money electronically.
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Moreover, brokers and banks have also been allowed to submit the IPO application and pay subscription money on the behalf of their clients.
Resultantly, over 80-85 per cent of IPO applications have been received through e-IPO channel. 5,835 new investors have joined the capital market through e-IPO.
To shift from the traditional and manual method of processing listing/IPO applications, the SECP in coordination with the PSX, has deployed an online system named “PRIDE”, through which issuer/company can submit an IPO application, interact with the PSX and get update/status of application.
The PRIDE has been operational and the number of applications is being processed through the same. It would help reduce processing timelines and act as one-stop solution for IPO/listing of securities providing all stakeholders including consultant to the issue, issuer and the investors, access to homogenous listing status and approval information.
The SECP has introduced enabling framework for Special Purpose Acquisition Companies (SPAC). The SPAC enables investors/pub-lic to co-invest with sophisticated, highly experienced managers and benefit from the appreciation in the share value of acquired units. One SPAC has been registered, however, no transaction has been matured as of date. The SPAC can promote merger and acquisition transactions thereby creating synergies and promote economic development.
Copyright Business Recorder, 2022
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