SECP Seeks Input on New Share Rights Policy Framework

The Securities and Exchange Commission of Pakistan (SECP) released a consultation paper on Wednesday, asking for public comments on a proposed policy for issuing ordinary shares with different rights and privileges. The goal, as stated in a press release, is to improve corporate governance, protect shareholders, and increase transparency in Pakistan’s capital market.

The suggested framework sets out rules and compliance requirements for companies offering shares with variations, like differences in voting rights, dividends, or what shareholders get if the company shuts down. It tackles issues tied to control, shareholder influence, and fair decision-making. The paper also stresses the importance of clear pricing and exit options for investors, ensuring transparency and fairness in the market.

The SECP looked at how other countries handle similar share structures to shape a policy that fits Pakistan’s financial system. They’ve noted risks, such as governance problems or weaker influence for minority shareholders, and are suggesting limits to keep things balanced and maintain investor trust.

The commission is asking for input from investors, companies, legal professionals, and other stakeholders to fine-tune the policy based on their feedback.