SECP unveils draft guidelines for right, bonus shares

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Friday unveiled a draft of new guidelines for the issuance of right and bonus shares.

“The regulations are aimed at streamlining all legal and procedural requirements for issue of further capital, optimum disclosures by companies to all stakeholders and protecting the rights of shareholders,” the SECP said in a statement.

The draft of regulations has been placed on the SECP’s website to solicit public opinion. Stakeholders are encouraged to provide their comments through post or email to ccg@secp.gov.pk. Currently, companies issuing shares by way of right issue, bonus issue, other than right, shares having differential rights and privileges, shares at discount or employee stock option schemes are required to comply with the requirements of the Companies Act 2017. However, compliance with applicable requirements of Companies (Issue of Capital) Rules 1996 and guide on issue of shares otherwise than right is mandatory for right and bonus issue by listed companies in addition to requirements of the Act.

Similarly, companies issuing different kinds of shares with varied rights and privileges are required to comply with the requirements of the Act and Companies' Share Capital (Variation in Rights and Privileges) Rules 2000. Moreover, public companies issuing employee stock option scheme under the Act are required to comply with the requirements of Public Companies (Employees Stock Option Scheme) Rules, 2001 and guidelines for the Structuring and Offering of the Employees Stock Option Schemes 2016.

“Companies are required to comply with certain directives, periodic disclosure and reporting requirements,” the commission said. The commission has notified draft Companies (issue of further shares) Regulations, 2018 with a view to cogently consolidate relevant requirements of the Act, varied directives and specifying certain additional conditions / requirements.