The Securities and Exchange Commission of Pakistan (SECP) has issued the procedure for buyback of shares of companies listed on the securities exchange. The SECP has issued Listed Companies (Buy-Back of Shares) Regulations, 2019 on Friday. The Listed Companies (Buy-back of shares) Regulations, 2016, have been repealed.
The general meeting in which the special resolution is to be passed shall be held not later than thirty days of the date of the meeting of the board of directors in which the purchase is recommended. The purchasing company shall make a public announcement within two working days of passing of the special resolution. The board of directors of purchasing company shall, before making the public announcement, authorise an officer of the company to act as manager to the offer who shall ensure compliance with the legal requirements pertaining to purchase of shares. The purchasing company shall, within five days of the public announcement, dispatch through registered mail or courier or electronic mode of communication, to all its members including custodian of depository receipts and other securities convertible into shares being purchased, if any, whose names appear on the register of members. The purchasing company shall communicate to the commission and the securities exchange simultaneously, the decision of the board of directors regarding recommendation of the purchase on the day the decision is made; make public announcement on the format specified in Schedule II and publish it in at least two daily newspapers, one each in Urdu and English languages having nationwide circulation at least seven days before the commencement of the purchase period. The purchasing company shall deposit the consideration payable in the designated clearing bank account at least one day before the settlement date, the SECP added.
The treasury shares shall not be sold, transferred or otherwise disposed of by the purchasing company within a period of six months from the closure of the purchase period. (2)The treasury shares shall not be sold by the purchasing company unless it has obtained approval of its board of directors, the SECP added.
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