SECP Issues Draft Unlisted Companies, Regulations, 2022
Umer Jamshaid Published December 04, 2022 | 08:20 PM
ISLAMABAD, (UrduPoint / Pakistan Point News - 4th Dec, 2022 ) :The Securities and Exchange Commission of Pakistan (SECP) has approved the draft, "Unlisted Companies (Buy-Back of Shares) Regulations, 2022", detailing the procedures for the purchase of shares issued by unlisted public and private companies.
The proposed regulations will facilitate startups, and boost investor confidence by providing an easy exit option to the shareholders, said a press release issued here on Sunday.
The draft regulations provide eligibility criteria, procedures, and mechanisms to be adopted by unlisted companies to buy-back their issued shares.
The unlisted companies will also have to cancel the number of bought-back shares from the total issued shares.
The regulations also require the submission of the final report to the registrar after completion of the process of buy-back of shares.
The draft regulations propose the board of directors of a purchasing company to make a declaration to the effect that the company is capable of meeting its liabilities and will not be rendered insolvent for twelve (12) months from the date of declaration.
The Companies (Amendment) Act, 2021 has enabled all companies, including unlisted public and private companies to buy-back their shares. Previously only the listed companies were allowed to buy-back their issued shares.
The draft Regulations have been issued vide SRO 2066 (I)/2022, have been placed on SECP's website at https://www.secp.gov.pk/document/sro-2066-i-2022-draft-unlisted-companies-buy-back-of-shares-regulations-2022/?wpdmdl=46234.
Any suggestions or objections, if any, received within a period of fourteen (14) days from the date of publication, shall be taken into consideration by SECP.