Public Offering Regulations: SECP may relax requirements for sell-off of government entities

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) Friday announced that the Commission may relax any of the requirements of the Public Offering Regulations, 2017 for privatization of government-owned entities by Privatization Commission through capital market.

The SECP has issued two notifications, ie, SRO 818 (I)/2020 and SRO 819 (I)/2020 to amend the Public Offering Regulations, 2017 and Public Offering (Regulated Securities Activities Licensing) Regulations, 2017, respectively here Friday.

The Securities and Exchange Commission of Pakistan (SECP) has also allowed that the scheduled banks, development finance institutions and investment finance companies can only act as Consultant to the Issue in case of public offering of debt securities and Growth Enterprise market.

Under the Public Offering Regulations, 2017, these shall apply to a public limited company or body corporate proposing to issue securities to the general public; an Offerer who intends to offer securities to the general public and sponsors of the public limited company or body corporate, the Consultants to the Issue, the Underwriter, the Book Runner, the Designated Institution, the Banker to an Issue, Investment Agent and Issuing and Paying Agent.

These Regulations shall not apply to an Issue by Special Purpose Vehicle or body corporate specifically setup by the Federal Government or any provincial Government for the purpose of issue of any debt security, under any other law or offer of securities.

According to the S.R.O. 818 (I)/2020, in case of scheduled bank, investment finance service license holder and development financial institution registered with the securities exchange as market maker for debt securities, it must be compliant with all the requirements laid down by the securities exchange relating to market making.

As per S.R.O. 819 (I)/2020, The Issuer shall appoint Consultant to the Issue, Book Runner, Underwriter, Balloter and Share Registrar and Banker to an Issue, where required, through separate agreements in writing. Provided that appointment of consultant to the Issue shall not be mandatory in case of initial public offering of other class of shares by listed companies. Provided further that the Commission may consider relaxing the appointment of Consultant to the Issue in case of privatization of government owned entities by Privatization Commission through capital markets Provided further, that in case the Consultant to the Issue is not appointed by the Issuer than a specific disclosure in this context shall be made on the Cover page of the Prospectus. Provided further, that scheduled bank, investment finance service license holder and development financial institution can only act as Consultant to the Issue in case of public offering of debt securities.

Copyright Business Recorder, 2020