KARACHI — The Pakistan Stock Exchange (PSX) has proposed a series of amendments to its regulations aimed at streamlining public offerings, enhancing visibility for Real Estate Investment Trusts (REITs), and overhauling the Growth Enterprise Market (GEM) Board, according to a formal notice issued this week.
The proposed reforms cover three key areas: simplification of listing requirements for public offerings, regulatory refinements for REIT Scheme listings, and structural updates to the GEM Board framework. PSX has invited public comments on the proposed changes by July 8, 2025, in accordance with Section 7(3) of the Securities Act, 2015.
To align its listing regulations with the Securities and Exchange Commission of Pakistan’s (SECP) Public Offering Regulations, 2017, and the Companies Act, 2017, PSX has proposed several changes to its listing process.
One major revision is the removal of the eight-month limit for audited accounts in the Prospectus or Offer for Sale Documents (OFSD). Instead, companies will be required to submit the latest two years of audited financial statements, supplemented by management accounts if applicable.
PSX also plans to eliminate certain procedural requirements from its own Rulebook, such as credit rating timelines and board resolutions, which would instead fall under the purview of SECP regulations. These documents would be submitted through SECP’s PRIDE system, ensuring no duplication of compliance.
For REIT schemes, PSX has proposed updates to Chapter 5 of its regulations to bring greater regulatory clarity and post-listing accountability.
Key proposals include defining terms such as Company, RMC (REIT Management Company), REIT Scheme, and REIT Regulations, and ensuring consistent use of the term “Unit of REIT Scheme.” A new clause, 5.20A, has also been introduced, requiring RMCs to comply with all post-listing disclosure requirements, in line with SECP expectations.
Building on earlier proposals from March 2025 (PSX/N-327), PSX has put forward structural reforms aimed at reinvigorating the GEM Board—a platform tailored for smaller and high-growth enterprises.
One of the headline changes is the replacement of the Information Memorandum (IM) route with a simplified Prospectus model to facilitate easier access to listings. The post-issue paid-up capital (PIPC) cap for GEM listings would be set at Rs500 million, while companies exceeding this threshold would be directed to list on the Main Board.
Other proposed changes include increasing the minimum public free float from 10% to 15% and expanding the minimum number of subscribers from 10 to 50. Corporate governance compliance under the 2019 Code would be tiered based on company size, and migration to the Main Board would remain optional, subject to specific criteria.
Additionally, PSX proposes replacing the requirement of an Advisor with a SECP-licensed Consultant to the Issue for GEM listings.
PSX has formally requested that stakeholders—including listed companies, REIT operators, consultants, and investors—submit their feedback on the proposed reforms by July 8, 2025. These changes, once finalised, are expected to modernise Pakistan’s capital market architecture and improve accessibility, especially for smaller issuers and REIT schemes.
The proposals are part of PSX’s broader strategy to align with international best practices and support capital formation across diverse asset classes.
