The Securities and Exchange Commission of Pakistan has asked the Corporate Law Review Commission Secretariat to submit the final draft of the new companies' law by March 31. The Commission, headed by Chairman SECP Zafar Hijazi in its meeting held on December 30, 2014, also instructed the Review Commission Secretariat to finalise the draft expeditiously and start the due process of public consultation.
Tahir Mahmood, Commissioner Company Law Division (CLD); Zafar Abdullah, Commissioner Securities Market Division (SMD); Akif Saeed, Commissioner Specialised Companies Division and Fida Hussain Samoo, Commissioner Insurance attended the meeting. It is pertinent to mention that the SECP is in the process of complete rewrite of the 1984 Companies Ordinance. The defining theme of this rewrite is to simplify the setting up of a company and make it convenient to start a new business for small investors. However, the law would not sacrifice on the flexibility and sophistication demanded by larger companies. The goal behind this exercise is to have smooth, efficient and speedy processes and to lay down a scheme of regulation that is fair, open and transparent in order to build a culture of trust and integrity in the market.
The new law will provide a breathing space for smaller companies by way of lesser regulation and an encouraging regime for raising and maintaining capital for large companies. The Commission looking into removing many old-fashioned concepts such as authorised capital, restrictions on raising capitals etc and pondering upon introducing the concept of no par value, treasury share, share warrants, partly paid shares etc, which if approved will be a major step towards liberalisation of economy. The Commission is also focusing on the issues related to minority shareholders protection and concepts such as minority buy out and representation of minority shareholders on the boards of the companies. The proposed law will definitely boost economic growth and prosperity in Pakistan.-PR
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