SECP greenlights launch of New Book Building System

November 05, 2025 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has approved the Joint Procedures for a new Book Building Mechanism, according to the press release issued by the Commisssion. 

This approval finalizes the recent landmark amendments to the Public Offering Regulations, 2017, and establishes the operational framework and procedures for book building in initial public offerings (IPOs).

The implementation of this revised system is a key milestone in modernizing Pakistan’s capital market.

It is designed to promote fairer price discovery, improve transparency, strengthen investor confidence, and support the SECP’s broader agenda of deepening market participation and enhancing efficiency.

Under the new mechanism, the Pakistan Stock Exchange (PSX) and the National Clearing Company of Pakistan Limited (NCCPL) have jointly developed an enhanced book-building system aligned with the revised regulations.

A major structural reform of the upgraded system is the replacement of the traditional Book Runner model with the concept of Eligible Participants (EPs).

This new framework allows all securities brokers, scheduled banks, development finance institutions (DFIs), and mutual funds to participate directly in the book-building process.

The system provides securities brokers with an intuitive interface to onboard clients efficiently. Similarly, banks and DFIs acting as Consultant to the Issue in an IPO can also register their clients for participation.

Eligible Participants can place bids directly into the book building system, either on their own behalf or for their clients.

Investors are also given the flexibility to choose between disclosed or undisclosed bids, ensuring confidentiality in bid visibility where desired.

By enabling wider participation, the new mechanism is expected to expand outreach, enhance efficiency, and improve overall market competitiveness.

The system leverages the existing technological infrastructure of the capital market, integrating the PSX book building system with NCCPL’s functions for the collection, settlement, and refund of margin money.

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