The Securities and Exchange Commission of Pakistan (SECP) issued a circular on Monday aimed at providing clarity regarding the filing obligations concerning changes in shareholding as prescribed by sections 465(4) and 510 of the Companies Act 2017.
The circular underscores the mandate set forth in Section 465 of the Companies Act, 2017, which requires companies, excluding those listed on stock exchanges, to report any alterations exceeding 25 percent in their shareholding, membership, or voting rights. This reporting is facilitated through the utilization of Form-3, as highlighted in a press release accompanying the circular.
A noteworthy clarification offered by the circular pertains to the ability of non-listed companies to submit Form-3 to the registrar even for changes that amount to 25 percent or less in their shareholding, membership, or voting rights. This adjustment aims to streamline reporting processes and ensure the accuracy of shareholding records amidst evolving business dynamics.
The issuance of this circular is a proactive step by the SECP to tackle practical challenges encountered in the reporting of share transfers. By promoting transparency and accountability, the regulatory body seeks to maintain up-to-date and reliable records of companies’ shareholding structures.
Furthermore, the clarification is designed to incentivize companies to promptly disclose any changes in their shareholding, membership, or voting rights, irrespective of the extent of the alteration. By fostering a culture of compliance, the SECP endeavors to enhance regulatory efficiency and market integrity.
Importantly, the accessibility of company information and returns maintained by the registrar as public documents ensures that stakeholders and interested parties can readily access updated shareholding information. This transparency not only fosters investor confidence but also facilitates informed decision-making and promotes market stability.
In essence, the SECP’s issuance of this circular represents a proactive measure to enhance regulatory clarity, promote transparency, and facilitate robust corporate governance practices within Pakistan’s corporate landscape.
