Staff Reporter
Islamabad
The Securities and Exchange Policy Board met in Islamabad at the SECP Headquarters under the Chairmanship of Professor Khalid Mirza.
The Policy Board approved changes in the Companies (Further Issue of Shares) Regulations, 2018 to facilitate capital formation and provisions whereby the Commission could impose conditions on further issue of shares were substantially removed. Major amendments include omission of (i) the provision restricting more than one rights issue within a period of 12 months; (ii) underwriting requirements for rights issue; (iii) requirement for preparation and submission of financial projections to the Commission in case of rights issues; (iv) mechanism for pricing the further issues either at premium or at discount; and (v) information and documents currently required to be submitted along with applications for seeking approval of the Commission to issue further share capital without rights offer; preference shares; and Employees Stock Option Schemes.
Amendments to Section 186/187 empowering corporate boards to appoint CEOs in all cases were approved to be incorporated in the Companies Act, 2017 to be proposed to the Government. Also, amendments to sections 42 and 43 substantially removing the onerous requirements with respect to licensing and liquidation of section 42 companies were approved.
The Board also approved the Commission’s plan for merging the Securities Act with the Futures Act together with the required rationalization / simplification. The Board also asked for a review of the LLP Act with the objective of eventual substantial rationalization/simplification of this statute.
The Policy Board also approved substantial reduction in NCCPL fees to facilitate investors and also advised the Commission to review the requirements for disclosure of financial statements on the website of trading only brokers. The Policy Board deliberated and approved the process for appointment of nominees on the Boards of PSX/CDC/NCCPL.
The Policy Board gave final directions to the Commission for reconstructing the SECP Annual Report, 2019 to include future outlook/plans for placing before the Government.
Concern was expressed by the Board regarding officials of SECP that remain attached to LEAs. The Board reiterated that LEAs should respect SECP’s position as covered by Section 41B of SECP Act, 1997 (the Act) and the Commission was urged to seek recovery of files impounded by one of the agencies.
The Board’s mandate vis a vis SECP was also deliberated upon and it was affirmed that the board will act in accordance with the provisions of the Act with the oversight role of the Board being emphasized as the cornerstone. The Board has pointed out various instances of regulatory action that needed rectification together with related policy directives.
