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SECP Issues Draft Unlisted Companies (Buy-Back Of Shares) Regulations, 2022

ISLAMABAD :The Securities and Exchange Commission of Pakistan (SECP) has approved the draft, “Unlisted Companies (Buy-Back of Shares) Regulations, 2022”, detailing the procedures of purchasing of shares issued by unlisted public and private companies.

The proposed regulations will facilitate start-ups and boost investor confidence by providing an easy exit option to the shareholders, said a press release issue by SECP here Thursday.

The draft regulations provide eligibility criteria, procedure and mechanism to be adopted by unlisted companies to buy-back their issued shares.

The unlisted companies will also have to cancel the number of bought-back shares from total issued shares.

The regulations also require submission of final report to the Registrar SECP after completion of the process of buy-back of shares.

The draft regulations propose the board of Directors of a purchasing company to make a declaration to the effect that the company is capable of meeting its liabilities and will not be rendered insolvent for twelve months from the date of declaration.

The Companies (Amendment) Act, 2021 has enabled all companies including unlisted public and private companies to buy-back their shares. Previously, only the listed companies were allowed to buy-back their issued shares.

The draft Regulations have been issued vide SRO 2066 (I)/2022, have been placed on SECP’s website at https://www.secp.gov.pk/document/sro-2066-i-2022-draft-unlisted-companies-buy-back-of-shares-regulations-2022/?wpdmdl=46234.

Any suggestions or objections, if any, received within a period of fourteen (14) days from the date of publication, shall be taken into consideration by SECP.

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