SECP proposes major reforms to expedite issuance of bonus, right shares

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed major reforms to expedite issuance of bonus and right shares.

In this regard, the SECP has issued a consultation paper seeking public feedback on proposed amendments to the existing regulatory framework governing the issuance of bonus and right shares. These proposed reforms are aimed at significantly reducing the time taken between the announcement of such corporate actions and the actual crediting of bonus or right shares to shareholders’ accounts.

The consultation paper outlines the current regulatory provisions related to the issuance process, presenting a comparative analysis of the existing and proposed timelines for each procedural step. It identifies specific requirements within the current framework that may be contributing to undue delays. According to the SECP’s analysis, existing end-to-end process—from the board's announcement to the credit of shares—can extend up to approximately 181 days for right issues, 85 days for interim bonus shares, and 51 days for final bonus shares. However, these timelines can be reduced by over 50%.

The SECP has noted that the existing framework does not fully reflect the technological advancements and the increasing digitalization of Pakistan’s capital markets. In certain instances, the absence of specified timelines under the current regime has resulted in inordinate delays, even after a bonus or right issue has been approved by the board. Consequently, shareholders may face considerable wait times in receiving their entitlements, despite companies acting in accordance with the prescribed regulations.

To address these concerns, the SECP proposes to revise the regulatory framework to streamline and expedite the issuance process by leveraging technology and enhancing operational efficiency.

The SECP has proactively engaged with key stakeholders, including PSX, CDC, and NCCPL to address these challenges and identify areas for improvement. Streamlining the process by introducing defined timelines for each stage can significantly enhance efficiency, ensuring

quicker access to funds and bolstering confidence in capital markets. By implementing these changes, the rights and bonus issue frameworks can better align with the dynamic needs of businesses while maintaining regulatory oversight, the SECP added.

Copyright Business Recorder, 2025