The Securities and Exchange Commission of Pakistan (SECP) has issued a consultation paper to gather feedback on proposed amendments to the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017. This initiative aims to strengthen transparency in takeover transactions while safeguarding the rights of minority shareholders.
The proposals include revising timelines for public announcements, updating price determination mechanisms for frequently and infrequently traded shares, and mandating enhanced disclosure obligations for acquirers and listed companies. The consultation paper also addresses provisions for voluntary offers, obligations of the Manager to the Offer (MTO), and handling complex cases like chain acquisitions.
The SECP emphasised that these amendments follow an initial round of consultations with key stakeholders, including market experts, legal advisors, chartered accountants, and listed companies. The regulator is now expanding the process to encourage broader participation, ensuring the proposals meet the evolving needs of the market.
This initiative is part of SECP’s broader efforts to improve corporate governance and protect minority investors. Previously, in February 2024, the SECP made significant amendments to the takeover regulations by requiring acquirers to make public offers in cash. This change was aimed at preventing acquirers from offering securities of potentially lower value, which could disadvantage minority shareholders.
Notably, Pakistan has earned recognition in this area, ranking 26th globally in the Protecting Minority Investors indicator of the World Bank’s Doing Business Report 2019.
The SECP has urged stakeholders and the general public to provide feedback on the consultation paper, which aims to refine the regulatory framework governing corporate takeovers. These amendments are expected to enhance investor confidence and strengthen Pakistan’s capital markets.
Contextually, the SECP’s focus on tightening takeover regulations comes as part of broader efforts to foster stability in Pakistan’s financial markets. The regulator has faced increasing pressure to address concerns of market manipulation, inadequate transparency, and investor protection gaps. This consultation is seen as a critical step toward addressing these long-standing issues and aligning Pakistan’s regulatory practices with global standards.
