SECP takes steps to strengthen regulatory framework governing takeover transactions

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has taken measures to strengthen the regulatory framework governing takeover transactions of listed companies by enhancing transparency and introducing measures for safeguarding rights of minority shareholders.

In this regard, the SECP on Wednesday issued a consultation paper to seek feedback on areas of improvement in the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017. Through these modifications SECP aims to strengthen the regulatory framework governing takeover transactions of listed companies by enhancing transparency and introducing measures for safeguarding rights of minority shareholders.

The key areas of improvement include proposals for streamlining public announcement timelines, revising price determination criteria for frequently and not frequently traded shares, and enhancing disclosure requirements for acquirers and listed companies. Provisions for voluntary offers, obligations of Manager to the Offer (MTO) and mechanisms for handling indirect or chain acquisitions have also been floated for further deliberations.

The proposals have been developed following an initial round of consultations with various stakeholders including market experts, MTOs, law firms, chartered accountants and listed companies. The scope of consultations is now being expanded to ensure wider participation in finalizing proposed amendment areas so any amendments can effectively address the evolving needs of the market and its stakeholders.

Additionally, stakeholders are encouraged to provide feedback on the timing of the appointment of the Manager to the Offer (MTO) to ensure its alignment with the overall takeover process. Any other Input/feedback on potential amendments to the Securities Act, 2015, or the Regulations is also welcome, particularly in areas that could enhance the efficiency, transparency, and effectiveness of the takeover regime. Such feedback will aid in identifying areas for improvement and aligning the regulatory framework with evolving market practices and stakeholder needs, SECP added.

Comments can be submitted to the SECP within a period of fifteen days of the notification at [email protected].

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