The directors, executive officers and substantial shareholder of equity securities in a listed company shall submit statement of beneficial ownership and report any subsequent change therein or position to the Securities and Exchange Commission of Pakistan (SECP). Through a latest notification issued by the SECP, the commission has issued draft of the Reporting and Disclosure (of Shareholding by Directors, Executive Officers and Substantial Shareholders in Listed Companies) Regulations, 2015.
Under the draft regulations, any person who becomes a director, executive officer, or substantial shareholder of a listed company shall give notice in writing to the company in Form-1 of his beneficial ownership in the equity securities of the company and in Form-2 for any subsequent change therein or any gain therefrom.
Every listed company shall, in accordance with Section 102 of the Securities Act (Act), keep and maintain a register of its directors interest notified under Section 101 of the Act in Form 3. The listed company shall notify the Commission in Form 4 whenever such company receives Form I from director, executive officer, or substantial shareholder pursuant to the requirement of section 101 (I) of the Act. The directors, executive officer and substantial shareholder of equity securities in a listed company shall, in accordance with section 103 of the Act submit statement of beneficial ownership in Form 5 and report any subsequent change therein or position to the Commission in Form 6.
The rules said that any gain made from the purchase and sale, or sale and purchase, of listed securities within a period of less than six months shall be reported to the Commission in Form 7, within seven day of accrual and shall be tendered to the Commission for onward credit to the Federal Consolidated Fund. The gain shall be computed in the following manner, namely,-
Firstly, by matching the transactions in chronological order and the recoverable amount shall be calculated with respect to every individual transaction by reference to the difference between the sale price and the purchase price, made within the period of less than six months. Explanation:- For the purposes of this clause the term "gain" includes profit made by purchase and sale or sale and purchase of same class of securities, within the period of six months.
Secondly, the purchases and sales shall be matched as aforesaid so long as the securities involved in the purchase and sale are of the same class and of the same listed company and for this purpose the shares shall be deemed as fungibles. Thirdly, any loss arising out of any involved transaction in a listed security, shall be setoff against the gain arising out of such security computed in the manner aforesaid. Fourthly, the amount of brokerage, stamp duty and other expenditure actually paid or incurred in making the gain may be deducted by the person by whom it is to be reported or tendered subject to production of such documentary evidence in support of the payment having been made or expenditure having been incurred as may be acceptable to the Commission and matching of cum-bonus/cum-right shares sold after announcement of said pay-out, duly approved by Board of Directors, with purchase of ex-bonus/ex-right shares, sale price may be adjusted to the extent of payout, subject to production of such documentary evidences.
Every listed company shall once in each year in accordance with section 107 of the Act prepare and file online relevant information as per detail given in e- Services Process of the Commission titled as Annual Return by listed companies SMD-BO-l07. Every listed company is required to file the information prescribed with the Commission within forty five days from the date of the annual general meeting held in the year or, where no such meeting is held or if held is not concluded, from the last day of the calendar year to which it relates.
The Commission may provide e-service for the electronic filing or lodging of any Form, document and return required to be filed or lodged with the Commission. Provided that the Commission upon an application received along with non-refundable processing fee prescribed by the Commission and justification for filing of the information in physical form instead of online, may allow the applicant to do so, subject to such conditions as deemed fit.
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