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Jun 01, 2020 PRINT EDITION
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Listing of companies: SECP to relax major condition under IPO regulations

The Securities and Exchange Commission of Pakistan (SECP) is planning to relax a major condition for listing of companies under new Initial Public Offering (IPO) Regulations under which companies with less than 3 years operational track record would be ma

January 12, 2020

The Securities and Exchange Commission of Pakistan (SECP) is planning to relax a major condition for listing of companies under new Initial Public Offering (IPO) Regulations under which companies with less than 3 years operational track record would be made eligible for listing.
Through an SRO 27(I)/2020, the SECP has issued draft amendments to the Public Offering (Regulated Securities Activities Licensing) Regulations, 2017.
The Securities and Exchange Commission of Pakistan (SECP) has relaxed certain conditions of Initial Public Offering (IPO) Regulations for corporate sector aimed at encouraging new listings, safeguarding public interests, simplifying listing process and increasing capital formation, besides providing ease of doing business.
According to the SECP, the SECP focused on rejuvenating IPOs. Draft amendments to IPO Regulations are placed at SECP's website for public consultation. Interested people/institutions can submit their opinions/suggestions to the SECP within 14 days of placement.
The SECP said that the important changes in IPO regime include; companies with less than 3 years operational track record are made eligible for listing; requirement of audited accounts reduced from 5 to 2 years and objective criteria for listing of Green field projects have been introduced.
The amendments to IPO framework aim at encouraging new listings, safeguarding public interests, simplifying listing process and increasing capital formation, besides providing ease of doing business, the SECP added. The SRO 27(I)/2020 issued by the SECP stated that an applicant which is eligible for Trading and Self-Clearing or Trading and Clearing category of license as a securities broker under the Securities Brokers (Licensing and Operations) Regulations, 2016 and has opted to apply for license of consultant to the issue and/or underwriter a s part of application for license of a securities broker or application for conversion to any category of securities brokers shall not be required to submit a separate application for license under these regulations.
The SECP said that a securities broker which holds a Trading and Self-Clearing or Trading and Clearing category of license as a securities broker under the Securities Brokers (Licensing and Operations) Regulations, 2016 and has opted to apply for renewal of license of consultant to the issue and/or underwriter as part of application for renewal of license of a securities broker shall not be required to submit a separate application for renewal of license under these regulations.
A Trading and Self-Clearing category securities broker with a minimum Broker rating as may be specified by the Commission shall be eligible for the purposes of sub-regulation (5) of regulation 3 of the Public Offering Regulations, 2017 subject to the condition that the amount to be underwritten shall not exceed three times of net worth of such securities broker and such other conditions as may be imposed by the Commission, the SECP added.

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