SECP proposes registration and trading platform for public unlisted companies

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has issued a consultation paper proposing launch of a registration and trading platform (RTP) for public unlisted companies at the Pakistan Stock Exchange (PSX).

The registration of eligible unlisted public companies at the PSX, coupled with public dissemination of financial results, will significantly increase visibility of the corporate sector. This measure is expected to motivate companies to adopt improved corporate governance practices, disclosures and documentation; and embrace a culture of increased transparency and public accountability, stated a press release on Wednesday.

A phased implementation approach has been suggested in the consultation paper, companies with paid-up capital of Rs200 million or more will be required to register in the first phase, following which, companies with paid-up capital between Rs25 million and Rs200 million will be registered on the RTP.

The RTP provides unlisted companies a unique opportunity to reach a much wider investor base, given the local penetration and international visibility of the PSX among global investors and media outlets. On gaining familiarity with the fully automated and digital capital market infrastructure, unlisted companies will find it easier to pursue listings on the PSX Main board or GEM board in the future.

The concept paper provides proposes mandatory registration of unlisted public limited companies on the RTP. This registration would enable existing shareholders and sophisticated investors, such as high net-worth individuals, financial institutions and corporates to trade in shares of RTP-registered companies.

It is important to note that RTP registration does not equate to formal PSX listing. RTP-registered companies will not enjoy the benefits of being listed on the PSX, nor can they raise funds from the stock market without going through the SECP and PSX approval process. The paper finalised after input from the market infrastructure institutions is placed on the SECP website. Stakeholders have been requested to submit feedback to the SECP by February 6.