The Securities and Exchange Commission of Pakistan (SECP), with the approval of the federal government, has notified the draft Public Offering of Securities Rules, 2016, and has also placed the same on its website to obtain public opinion within 30 days.
Public offering of securities normally known as the primary market is an important segment of the capital market. The POS Rules cover public offers of both equity and debt securities.
Through the public offering, corporates raise fund from the general public against issue of securities, therefore, it is imperative to provide appropriate and updated regulatory framework for regulating the issuance of securities through public offering.
The rules shall be applicable to the issuers and offerors proposing to offer securities to the public by way of initial public offering (IPO), right and bonus issues; sponsors of the issuers and listed companies.
The draft rules encompass the conditions for issue of shares by way of IPOs, right and bonus issues by listed companies, issue of shares at premium and discount, divestment of shares by the substantial shareholders; issuance of debt securities and convertible securities. The purpose is to facilitate and properly regulate issuance of shares, debt securities and convertible securities.
Moreover, the Companies (Issue of Capital) Rules, 1996, have been covered in the draft rules. It is expected that the rules will help in developing a disciplined and robust primary market, facilitating both corporates and investors.-PR