KARACHI: Pakistan’s securities regulator has eased listing requirements for initial public offerings (IPOs), allowing established businesses operating as partnerships, limited liability partnerships and carved-out business divisions to use their historical profitability records to qualify for stock market listings.
The changes, announced by the Securities and Exchange Commission of Pakistan (SECP) on Thursday through amendments to the Public Offering Regulations, 2017, are aimed at reducing barriers to listing and encouraging more businesses to raise capital through the Pakistan Stock Exchange.
Under the revised framework, eligible businesses can use their historical profitability record prior to incorporation as a public company to satisfy the two-year profitability requirement for an IPO, removing a hurdle that previously limited access to equity financing for many established firms.
“The amendments are expected to encourage more businesses to enter the corporate sector, access financing through the stock market and contribute to economic growth and job creation,” the SECP said in a statement.
Pakistan has sought to deepen its capital markets and expand financing options for businesses as policymakers try to stimulate private-sector investment and economic growth following a period of economic stabilization under an International Monetary Fund-supported reform program.
The SECP said investor safeguards would remain in place under the revised framework.
Businesses seeking to list under the new rules will be required to prepare revised financial statements, audited by a Quality Control Review-rated audit firm, and submit audited financial statements covering the period during which they operated as a public limited company.
In addition, sponsors’ entire shareholding will remain subject to a two-year lock-in period following listing, the SECP said.
The regulator said the amendments have been notified through changes to the Public Offering Regulations, 2017 and are available on the SECP website.
