SECP cuts bonus, right issue timelines

August 29, 2025 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has approved key amendments to the Companies (Further Issue of Shares) Regulations, 2020, significantly cutting down the timelines for processing bonus and right issues to enhance shareholder value.

Previously, completing a bonus issue could take up to 85 days, while a right issue required as many as 181 days from initiation to the crediting of shares in investor accounts.

Under the revised regime, the duration has been reduced drastically, with bonus issues now to be finalized within 11 days (an 87% reduction) and right issues within 53 days (a 70% reduction).

The reforms are the result of SECP’s collaborative and consultative approach to capital market improvements.

A detailed consultation paper was first circulated to gather industry feedback, followed by extensive online and in-person sessions with stakeholders, including the Pakistan Stock Exchange (PSX), Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL), issue consultants, legal experts, and financial professionals.

Based on this input, a draft of the proposed amendments was shared, refined, and then formally approved.

Among the most notable changes are: reduced notice periods for book closure, introduction of a one-day book closure period made possible through technological advancements in market infrastructure, faster review and approval of offer documents, speedier issuance of Letters of Right, and accelerated allotment of both right and bonus shares.

With these changes, investors will gain access to their bonus and right shares much earlier, allowing them to take advantage of market opportunities without delay.

The revised regulations will take effect on October 1, 2025, alongside corresponding updates to the PSX Regulations and CDC procedures.

Looking ahead, the SECP is also exploring additional measures again in consultation with stakeholders to shorten the timeline for dividend disbursements and to resolve issues related to Roshan Digital Accounts (RDAs), including the ability to open accounts with multiple brokers and to transfer funds seamlessly between RDAs owned by the same individual

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